Petrol Price profit

davidjpowell

MB Enthusiast
Joined
Nov 8, 2007
Messages
4,908
Location
Doncaster
Car
E350 w212 and Ford Ranger
'Most independent forecourts make between two and four pence a litre - meaning a full tank only nets the petrol station between £1 and £2 profit.'

BBC News - High cost of petrol defended as oil price falls

Petrol companies complain that they make virtually no money retailing Petrol, but rely on the shops to make the money.

Seems obvious, and there have been investigations which have accepted this (or been drowned by paperwork one wonders).

So why are they still retailing the profit? Is it because they load the costs on the retail stage, and make, judging by their annual profits a nice earner on the refinery stage.

Am I wrong to be wondering if its all smoke and mirrors?
 

Igurisu

Active Member
Joined
Jul 20, 2011
Messages
680
Location
Lancashire
Car
911 Turbo
No you're not. Remember a companies first responsibility is to its shareholders. However much the public complain doesn't really matter that much, both the oil companies and the government know that we will continue buying fuel as most of us don't have any choice. Certainly if you live outside major cities public transport is just not a viable option.

Hence, good profits for the oil companies, more tax added to fuel by our government.
 

Red C220

MB Enthusiast
Joined
Jul 30, 2011
Messages
4,196
Location
Surrey
Car
2015 SL400 : 2017 S6 Avant
What is the actualy breakdown of a cost of a litre of fuel?

I don't mean roughly. Is there a site, showing to the penny, how the price of a litreof fuel is made up?
 

gIzzE

MB Enthusiast
Joined
Jan 20, 2004
Messages
5,713
Location
Norfolk, UK
Car
E350 coupe + 320d ED Touring + Porsche 911 Carrera 4 + Honda Jazz
My mate owns a petrol station and he makes money from the stuff they sell in the shop, not the fuel.


He has to pay for the fuel before the delivery, and he gets a fill up a week and I think he said they were 35k litres each, so £40k worth a week? which brings in about £6k a week?
So, you can hardly run a petrol station on that.
 

jaymanek

Authorised Forum Sponsor
SUPPORTER
Joined
Nov 29, 2002
Messages
16,415
Location
Nuneaton Warwickshire
Car
Lots of Mercedes!
If he is making 15% gross margin on fuel he is doing extemely well. We were making around 5-6p per litre which today equates to around 4% gross, out of which all the overheads come out.
Its a tough business with cashflow being the main killer.
If your friend sells 35K litres a week he will most likely need 80-100K cash to cover for rolling stock..

Shop is the main business with any fuel station... That is the bit that pays the bills, the fuel just brings the customers in... Hence why fuel stations are quickly becoming mini service stations trying to grab margin where possible.
 
OP
OP
D

davidjpowell

MB Enthusiast
Joined
Nov 8, 2007
Messages
4,908
Location
Doncaster
Car
E350 w212 and Ford Ranger
But the oil company all say that they make no money from selling Petrol, hence the limited profit to independents.

I just wonder though if this is a red herring and whether the oil company's are making there money before the actual retail stage.

If it's as unprofitable as they say each time the gubberment threatens to investigate them, then why are they still making it.
 

markjay

MB Master
SUPPORTER
Joined
Jun 24, 2008
Messages
36,986
Location
London
Car
W204 C180 Executive SE 2013 Automatic / COMAND NTG4.7 and Morel speakers fitted by www.comand.co.uk
At least three petrol stations in my area closed down over the past 10 years.

I am not aware of any new one that opened during that period.

So there must be at least some truth to it?
 

gIzzE

MB Enthusiast
Joined
Jan 20, 2004
Messages
5,713
Location
Norfolk, UK
Car
E350 coupe + 320d ED Touring + Porsche 911 Carrera 4 + Honda Jazz
If he is making 15% gross margin on fuel he is doing extemely well. We were making around 5-6p per litre which today equates to around 4% gross, out of which all the overheads come out.
Its a tough business with cashflow being the main killer.
If your friend sells 35K litres a week he will most likely need 80-100K cash to cover for rolling stock..

Shop is the main business with any fuel station... That is the bit that pays the bills, the fuel just brings the customers in... Hence why fuel stations are quickly becoming mini service stations trying to grab margin where possible.

I was just guessing figures, the point was the fuel is just a product to help bring people through the shop door, not a money maker.


And you're right, anyone in retail is being seriously stressed by cash-flow these days.
 

Users who are viewing this thread

Top Bottom