UK diesel cheapest in Europe without taxes

[BTB 500]

Is today Groundhog Day.?


post#28

Your answer then of "why bother" presumably meant there isn't a worthwhile profit to be made? Either something is financially viable to a large company or it's not, "bother" doesn't really come into it. If you already have a retail organisation, infrastructure, systems, etc. adding more outlets isn't a big deal. So if there's money to be made, you do it. If they're losing money, you close them.

 

[Dieselman]

Your answer then of "why bother" presumably meant there isn't a worthwhile profit to be made? .

That's not what I said. The fuel producers are selling the finished product to others anyway so why bother with the aggravation and cost of their own retail outlets that in themselves don't make much money.

My post.

Why bother. They are selling the basic product to other people to lose their shirt with the cost of a retail operation.

Most sites are franchise anyway, even if under a major brand name.

 

[BTB 500]

why bother with the aggravation and cost of their own retail outlets that in themselves don't make much money.

Again you're personalising this, which is not the way big companies work. But it seems we agree that retail forecourts don't make much money ... which is all I was disputing with Russ.

 

[recycled]

what is the isle of man take on fuel? they are not in the EU so what gives?

 

[Dragon]

Your answer then of "why bother" presumably meant there isn't a worthwhile profit to be made? Either something is financially viable to a large company or it's not, "bother" doesn't really come into it. If you already have a retail organisation, infrastructure, systems, etc. adding more outlets isn't a big deal. So if there's money to be made, you do it. If they're losing money, you close them.

Forecourts make at least 5 to 10p per litre of fuel sold.

 

[Dieselman]

Again you're personalising this, which is not the way big companies work. But it seems we agree that retail forecourts don't make much money ... which is all I was disputing with Russ.

In what way have I personalised this? I answered your question first time round as to why the fuel producers aren't interested in running forcourts and you then repeated the question later on, so not surprisingly, I referred you back to the first time you asked the same question.

All the subsequent posts had been around answering that question.

My answer wasn't simply 'why bother' as you misquoted it to, it was a more full explanation than that and took into account the financial aspect surrounding that answer.
Say for example the forcourt business runs at break even but production makes healthy profits, why would a producer want to become involved in forcourts.?

There may also be another reason we haven't mentioned so far. It may be deemed against anti competition laws for the major brands to have more forcourts.

There is nothing personal at all but it did seem a waste to have used one and a half forum pages to return to the same point.
As you mentioned the word 'again' I would be interested to see where I have personalised posts. I usually provide accompanying links to back what I say, which is a lot more than many posters do.

Please don't think I'm having a go at you Bill, I'm just trying to understand where you are coming from.

 

[Dieselman]

Forecourts make at least 5 to 10p per litre of fuel sold.

That's the gross margin, what's the profit after overheads. Isn't the figure about 5-6p mark up?

I'm sure Jay can confirm.

 

[sylvester]

In what way have I personalised this? I answered your question first time round as to why the fuel producers aren't interested in running forcourts and you then repeated the question later on, so not surprisingly, I referred you back to the first time you asked the same question.

All the subsequent posts had been around answering that question.

My answer wasn't simply 'why bother' as you misquoted it to, it was a more full explanation than that and took into account the financial aspect surrounding that answer.
Say for example the forcourt business runs at break even but production makes healthy profits, why would a producer want to become involved in forcourts.?

There may also be another reason we haven't mentioned so far. It may be deemed against anti competition laws for the major brands to have more forcourts.

There is nothing personal at all but it did seem a waste to have used one and a half forum pages to return to the same point.
As you mentioned the word 'again' I would be interested to see where I have personalised posts. I usually provide accompanying links to back what I say, which is a lot more than many posters do.

Please don't think I'm having a go at you Bill, I'm just trying to understand where you are coming from.

An excellent point well made.

It was Lord Browne former chief executive of BP who was quoted several years ago as saying that it would be unthinkable for BP to completely divest its forecourt interest in the UK, as it was their home market,
Even if it made business sense to do so.

So not unsurprisingly BP are in the midst of doing just that with a significant proportion of their US retail outlets, which are being franchised out.
Its not that they are not profitable, just that independent’s can make greater margins than the big companies themselves who have to carry significant overheads associated with retail outlets.

There is a large liability in terms of staffing, pension scheme (Still final salary in the uk) and the cost of the capital investment, which is a long term commitment and drag on the bottom line.
Especially so when they can employ that capital elsewhere for bigger returns, such as in more exploration and production, while maintaining brand presence and guaranteed outlets for their own upstream refining, which carries higher profits relative to distribution.

 

[BTB 500]

In what way have I personalised this?

We're talking at cross purposes, sorry. I meant that while words like "bother" and "aggravation" might apply to people like you and me, they simply aren't factors for large corporations. Either something is cost effective / profitable, or it isn't. If their filling stations made good money then they would have more, to make more money for their shareholders. It's that simple.

As already commented, the oil majors are closing / selling outlets. So we deduce that it's not profitable for them to operate them (although for some UK based companies there will probably always be a minimum number - even running at a slight loss - simply to maintain presence / brand awareness).

Independently-operated (and franchised) stations are closing at an even faster rate; as mentioned the overall figure is an average of 600 stations permanently closed per year in the UK, over the last 5 years. So we deduce that most independents can't operate them any more profitably. The last retail margin I saw published (couple of months ago, from the BBC I think) was 2-3p per litre.

Nobody is disputing that producers and wholesalers make decent money. Just that retail does.

There may also be another reason we haven't mentioned so far. It may be deemed against anti competition laws for the major brands to have more forcourts.

Only if they used their corporate might (profits from other countries/operations) to subsidise the cost of UK retail ... allowing them to lower prices. Which of course is exactly what some protestors have demanded they should do! Even though it would bankrupt many competitors - not a healthy situation in the longer term.

Please don't think I'm having a go at you Bill

That's OK, I didn't. As 'discussion' threads go this has got to be one of the most civil

 

[jeremytaylor]

In France last week I thought the diesel was expensive at 1.20 Euros/l.

Until I came home and it's £1.29/l!!! And unleaded was £0.15/l cheaper. What on earth is going on?!?!

Isn't it funny how as more and more people drive diesels, the fuel gets more and more expensive compared to petrol? (yes, I've heard the 'refinery capacity' arguement).

Why does this government still tax diesel more than petrol?

 

[Dieselman]

Why does this government still tax diesel more than petrol?

Groundhog Day..

This REALLY is becoming the 'tedious link'.
http://www.hmrc.gov.uk/budget2007/bn53.htm

Sorry to be snappy but this has been mentioned about a thousand times recenty.