Fuel prices MEGATHREAD

[Cyclone]

If you believe fuel retailers who say that they make between 1p and 7p profit per litre of fuel it makes you wonder why they bother, when you think if someone drove off without paying and got away with it how much fuel would they have to sell to recoup what they had just lost, also the majority of small fuel retailers have to pay for the fuel up front

mel

 

It's probably true, as far as it goes. What they don't mention is that Shell and BP are the parent companies of the low margin forecourts (or many of them) and they make massive profits from the refinery and pumping and extraction business. It's just a shell game where they charge themselves a lot for fuel from the refinery and then claim that they've only made a small profit selling petrol.

[metalman]

In reply to the original question about what am I going to about it, I suppose the answer is, stay at home more. It's already getting too expensive to go for a day out anywhere for pleasure, what with petrol prices and escalating parking charges when you get there. While staying at home is a green option as well, it also means that we aren't out spending money so if we all do that, it won't be long before we're back into a recession again.

[DragonofAna]

In reply to the original question about what am I going to about it, I suppose the answer is, stay at home more. It's already getting too expensive to go for a day out anywhere for pleasure, what with petrol prices and escalating parking charges when you get there. While staying at home is a green option as well, it also means that we aren't out spending money so if we all do that, it won't be long before we're back into a recession again.

 

Cost me £11 in deisel to go to scarborough and back by car. I spent a little cash there and enjoyed walking about the town. Many people spend more than that on a takeaway so not sure about a day out being too expensive.

[SimonCookson]

Found some useful tips of getting the most out of your tank of fuel on this site:

 

http://sheffieldismyplanet.co.uk/advice/travel

[Greybeard]

Cost me £11 in deisel to go to scarborough and back by car. I spent a little cash there and enjoyed walking about the town. Many people spend more than that on a takeaway so not sure about a day out being too expensive.

 

If you own a car and are happy to pay the standing costs of ownership then the cost of fuel to actually use it to get out and about is still quite a marginal expense.

 

If you cost the trip to Scarborough using public transport using the car is a no-brainer and the convenience/flexibility/comfort argument blows public transport out of the water.

 

Our location forces us to use a car to get anywhere useful so increasing fuel costs will have to be met by savings in other expenses.

[DragonofAna]

Even with the costs of road tax and insurance. Four people in a car travelling to scarborough for the day - works out at £11 in fuel; a couple of pounds in tax and insurance (I'll let someone else do the math); and still does not work out that expensive. How much is it for a single person to go by coach or train?

 

It costs me a couple of pounds to go to Sheffield and visit my relatives. If I used public transport - aside from the time it takes waiting for buses and trams and then the walking involved, I would have to pay a very minimum £3-£5

 

How is it that people complain about the cost of using a car and claim that public transport is cheaper and more efficient?

[Number Six]

I'm sure the car is cheaper than other forms of transport, and it's perfect for days out, especially with kids and bikes and footballs and things to take with you - that's what I want to get back to really I think; when I bought my first car I used it to go on days out - I walked to 'work' (University - but I did work!) every day and I walked to the shops usually, except perhaps once a month when I did a big shop - and then I usually took 3 or 4 house mates with me because back then we didn't all have cars :-)

 

Now I seem to spend a massive chunk of my disposable income on simply driving to and from work everyday - as I said we do more miles as a family now, which magnifies the cost, but putting £20 in to a Ka and it not even being half a tank is depressing - and it always seems to be the case that both cars run out of fuel on the same day, which makes it even more depressing. There is no more miserable way to spend £100 than to drive one car to the petrol station, fill up, then go home, get the other one and do the same thing because you know you'll get up too late to do it in the morning.

 

Maybe it's just because we drive more, maybe it's because petrol is more expensive, maybe it's because our income has fallen a bit because of the recession, maybe it's because insurance never seems to get any cheaper regardless of home many years no claims you have (16 years between us), maybe it's because the tax seems to be more every year, or maybe it's because the world is telling me to be more environmentally friendly, but I feel that having two cars now is an untenable position - and getting back to driving for pleasure and riding a bike in the fresh(ish) air really appeals.

[truman]

Does anyone know how today's fuel prices compare historically when compared to average earnings?

[Cyclone]

Update to what I was saying about fuel prices, prices have risen slightly in the last 2 months, but are still way below the peaks we saw a few years ago. The exchange rate has worsened though and the prices I was talking about are in US $, so the comparative price might be close to the peaks. That still doesn't actually explain the petrol being 20% more than it was during those peaks though.

[Number Six]

Yeah you can keep quoting yourself but that does not answer the question. How much in fuel goes on Tax. If this is a larger amount and it is tax that is increasing then how can you say the increased cost is because of an increase in crude?

 

There is bound to be some increase in the cost per barrel, but not enough to warrant the prices motorists are paying at the pumps.

 

I tried to make it clear in my OP that I'm not that interested how much of it is tax - clearly it is a lot.

 

However you cannot escape the basic principle that:

 

1) we are using oil quicker than it is being created therefore

2) the amount of oil available to us is falling (reduction in supply)

3) the amount of oil we are using is increasing as countries become more affluent (e.g. India and China) and start consuming more (increase in demand)

4) the evidence seems to be that demand for fuel is relatively price inelastic in the short term (increase in price doesn't affect demand that much)

 

When you have a reduction in supply, the price tends to go up.

 

When you have increased demand, either the price will rise, or the supply will rise. As supply cannot rise indefinitely (oil is a finite resource) prices will rise.

 

This is slightly complicated by the supply being variable in the short to medium term - the oil companies can choose to pump more or less out of their wells each month - but ultimately there is only so much they can get out, so in that sense the supply is fixed.

 

So - regardless of taxes, the price of petrol and diesel is going to go up, and eventually those price increases are going to affect all of us - be it through increased costs of travel, or increased costs of goods and services that have been delivered.

 

I think it's going to present some interesting economic choices - as I say, low interest rates, high fuel prices, high road tax and minimal house price inflation mean that for the first time it might actually make sense for me to sell my house and rent rather than commute, for example.