Oil price Vs Price at pumps

[johnmac]

With oil dropping to a 7month low today ($92.77 a barrel) some $55 less than the July highs of $147, why have the prices at the forecourts remained high? Percentage wise,we are looking at a 37% drop.If related to pump prices, we should be currently looking at around 75p a litre for unleaded from the 118.9p a litre highs,yet the price is still at 112.9p a litre.75p may be unrealistic, but the price at the pumps has only dropped around 5%. How easy a target are we as motorists? The 32% must be going somewhere.

It seems 'unbelieveable' that this seems to be just 'tough' and is never questioned

Then there is the new road tax......................

Rant over for now

[mark1319]

From what I've been told the price it is at now will now be seen at the pumps until it's delivered i.e. the price now will be at the pumps in Oct and it'll drop then. Hope this makes sense, as for it's authenticity I can't say.......

[Big Sig]

It makes sense, i'll believe it when I see it

[glenboy]

It'll never drop to 75p a litre,i'll eat my hat if it does,the goverment and most business's are not going to lower the price, as we the motorist are going to pay whatever they sell it at,Bl00dy rip off britain again,if you ask me.......

[ed taylor]

I fully understand when they say they are selling "old stock" so they have to price the fuel accordinly. But what I dont understand is how come the price goes up imeadiatly when the price of oil goes up, are they not selling "old stock" then??? Someone some where is making fools out of us motorists, or at least a lot of money. I heard on the news that the OPEC Nations were cutting the production as the cost had fallen, this I recon is only to keep the price up, so they can make their large profit still.

[luckyluke]

re: ed taylor

I wonder how many people know what car is in your avatar

[johnmac]

A reply from the director of petrol filling stations (Morrisons). Fair play to him for taking the time to explain in response to my email

1. Crude and refined products are completely separate markets, although over time there is obviously a relationship. In July, product prices were around $1,200 a tonne. Now they are around $1,000 a tonne - a drop of only 17%. This is mainly due to demand in the US and the traded markets keeping prices up with the threat to supplies from the hurricane season. We have NO control over this price!

2. Product is priced in dollars so the strengthening dollar since July has offset falling cost prices
In July $1,200 a tonne for unleaded at $2 to the £1 translated to a base cost price of 46.6p a litre. At $1,000 a tonne that would drop to just over 39p, but because the dollar is now at £1.75 the actual base cost is 44.5p.

3. Most of our fuel we buy isn't on today's market prices - most of our deals are lagged by 1 or 2 weeks and are based upon an average price over a period of days. Therefore the ability to drop is not immediate. On the same terms, we can hold prices down for a period when costs rise.

3. A large element of the price at the pump is fixed
Duty is 48.35p.
Vat on the duty is another 8.5p a total of 56.85p fixed
The cost of fuel itself is around 40-50p for unleaded (I am sure you will appreciate I cannot be too specific here for commercial reasons - this figure includes the supplier's margin and our retail margins which I promise you are not significant).
Vat on the fuel is 7-9p
That gives a variable price elemnent of 50-60p

Whatever happens to cost prices, only the variable element would drop. In the ranges I have given above a 50% drop in cost prices would only translate to a 25% drop in retail price.

[byebyeitsagsi]

Fair play to morrisons for taking the time to give you a good reply there

[m8internet]

It is very unlikely that prices will go any lower than about £1.05 per litre for unleaded / £1.15 diesel
There has already been a reduction of about 12% in the last 4 weeks

[yorkshireborn]

when oil was $93 and rising UL pump price was between 98.9 and 101.9.

now who's ripping us off first it was the goverment now its the oil companys.


now there blaming the hurrican for the next rise.