Petrol prices- when does the madness end?

[Jawls]

Mr Spoon said:

Ankh87 said:

They could easily knock off 20p but they won't.

And that goes straight into the oil companies pockets. Even with a 50p government reduction it will be the same

What? A major duty reduction would quickly filter through and not just “go into the oil company pockets”. The price notifications I’ve seen at wholesaler level explicitly have duty split out, so not like it could be hidden.

[anonymous-user]

Jawls said:

Mr Spoon said:

Ankh87 said:

They could easily knock off 20p but they won't.

And that goes straight into the oil companies pockets. Even with a 50p government reduction it will be the same

What? A major duty reduction would quickly filter through and not just “go into the oil company pockets”. The price notifications I’ve seen at wholesaler level explicitly have duty split out, so not like it could be hidden.

In this industry 5p is a major reduction. But of course I will be wrong. So lets go with your idea

[yeager2004]

What's annoying me at the moment, is the Inland Revenue advisory fuel rates. Currently based on 165.1p for petrol, and 179.7p for diesel. Rates reviewed 1 June and not updated again until 1 September.

[mattyprice4004]

a_dreamer said:

Or spend £100 on haribo and just float everywhere on a sugar haze

Soon it’ll be cheaper to buy cocaine and just run everywhere!

[Jawls]

Mr Spoon said:

Jawls said:

Mr Spoon said:

Ankh87 said:

They could easily knock off 20p but they won't.

And that goes straight into the oil companies pockets. Even with a 50p government reduction it will be the same

What? A major duty reduction would quickly filter through and not just “go into the oil company pockets”. The price notifications I’ve seen at wholesaler level explicitly have duty split out, so not like it could be hidden.

In this industry 5p is a major reduction. But of course I will be wrong. So lets go with your idea

I’m not in the industry any more so I’m not in the detail of the recent numbers, but I strongly suspect there was a Platts price move in the other direction at the same time.

I’m just telling you how price notifications worked. So the purchaser gets a mail that says what their price that day will be, and duty is explicitly split out. So you couldn’t do any shenanigans there.

[monthefish]

From page 1 (only 3 months ago!!)

Joey Deacon said:

I have said it before, but I am amazed people haven't started to hoard cars such as the VW UP!, cars with £30 annual road tax and can do 60MPG.

Surely fuel is going to be in the £1.70 to £1.80 range in a couple of weeks?

&

[volvos60s60]

monthefish said:

From page 1 (only 3 months ago!!)

Joey Deacon said:

I have said it before, but I am amazed people haven't started to hoard cars such as the VW UP!, cars with £30 annual road tax and can do 60MPG.

Surely fuel is going to be in the £1.70 to £1.80 range in a couple of weeks?

&

Not sure people are seeing the benefit of running a car that costs buttons just yet. My Toyota iQ, which is free road tax and 60 mpg, has been for sale on PH for a while & no enquiries. Maybe I'll just keep it as i quite like it & it's pocket money to run

[DonkeyApple]

monthefish said:

From page 1 (only 3 months ago!!)

Joey Deacon said:

I have said it before, but I am amazed people haven't started to hoard cars such as the VW UP!, cars with £30 annual road tax and can do 60MPG.

Surely fuel is going to be in the £1.70 to £1.80 range in a couple of weeks?

&

I went and bought a shed of a 1.2 diesel Golf at the outset. I figured, given my cars, that it wouldn't take much more than 12 months to pay for itself as my weekly London commute has gone from £90 in petrol to £25 in diesel. It seems capable of returning 60mpg on the commute and around 45 in local use versus around 10-20 for anything else. It's also smart enough to realise it is as thick as mince so has never beeped, bonged, flashed a light, tugged at the steering because it's got confused between a bush and an attacking bear. I reckon I've saved around £700 in fuel costs so far so ahead of prediction. On target to win a free car for Christmas.

[monthefish]

DonkeyApple said:

monthefish said:

From page 1 (only 3 months ago!!)

Joey Deacon said:

I have said it before, but I am amazed people haven't started to hoard cars such as the VW UP!, cars with £30 annual road tax and can do 60MPG.

Surely fuel is going to be in the £1.70 to £1.80 range in a couple of weeks?

&

I went and bought a shed of a 1.2 diesel Golf at the outset. I figured, given my cars, that it wouldn't take much more than 12 months to pay for itself as my weekly London commute has gone from £90 in petrol to £25 in diesel. It seems capable of returning 60mpg on the commute and around 45 in local use versus around 10-20 for anything else. It's also smart enough to realise it is as thick as mince so has never beeped, bonged, flashed a light, tugged at the steering because it's got confused between a bush and an attacking bear. I reckon I've saved around £700 in fuel costs so far so ahead of prediction. On target to win a free car for Christmas.

Nice on

[BUG4LIFE]

Has probably been asked on here before, but are we going to see a big reduction in the future, or is near £2.00 a litre the ‘new norm’?!

[Snappy89]

BUG4LIFE said:

Has probably been asked on here before, but are we going to see a big reduction in the future, or is near £2.00 a litre the ‘new norm’?!

I don't think we'll ever see prices below the 1.50-1.60 mark again. But take into account that rapid deflation can also be just as harmful to an economy, so there won't be an appetite to push the prices down on anything too quickly. Deflation means nobody spends any money because "it'll be cheaper next week" etc.

That being said, I had noticed a garage about 8 miles from my home. The price of E10 at least went from 189.9 down to 186.9. Anecdotal but it's the first garage I've seen drop their price of any type of fuel.

[swamp]

BUG4LIFE said:

Has probably been asked on here before, but are we going to see a big reduction in the future, or is near £2.00 a litre the ‘new norm’?!

£2.00 a litre looks like the new normal, unless there is a savage global recession which would reduce demand on oil and result in lower fuel prices.

Be careful what you wish for!

[DonkeyApple]

BUG4LIFE said:

Has probably been asked on here before, but are we going to see a big reduction in the future, or is near £2.00 a litre the ‘new norm’?!

Yes. Part of the problem with viewing oil prices through the lens of petrol pricing is that it's easy to forget that during two years of global lockdowns oil plummeted in value to next to nothing. It sat for a long time around $40. OPEC+ have a desired $75-85 selling floor and that works as a floor in normal times. The current pricing that ranges from $100-120 is a result of an absence in price competition due to numerous wells being shut down during Covid as they were loss making. These will take 12-24 months to all come back on line and increase global supply. At the same time, demand suddenly reappeared post Covid and with reserves depleted that need also added to the demand side. Beyond that, there is a lot of risk premium being factored in over the short to medium term as a result of Russia.

Longer term we have supply rising but demand is almost certainly set to fall as the global economic outlook is weakening. Less commercial activity equals less oil needed. Added to that the risk premium caused by Russia will eventually end once Ukraine settles on a new border with Russia etc.

Petrol has a slightly different path. Prior to lockdown it was around £1.30-40. Since then more green charges have been applied (10% ethanol now so doubled in that regard and if there is a global food crisis then ethanol which is basically made from food that humans are outbid on, will be spiking and adding to our fuel costs). In addition, we buy the raw materials in USD and sell on in GBP. The value of the GBP has fallen quite hard against the USD. If I recall we've dropped from over $1.40 to $1.20 so that's a 15% increase on the raw materials.

What this means is that petrol which was at around £1.30 pre lockdown when oil was around the $85 mark will now be dearer when oil reverts to the $85 levels. Arguably around 20% dearer. This suggests that if Covid hadn't happened we'd be looking at pricing being £1.60+ now anyway.

What that suggests is that unless oil for some reason tanks, the Govt roll back the green initiatives on petrol, or cut the taxes then we can expect prices to settle in the £1.60-1.80 region.

Very weirdly, if one then considers the fact that Western currencies have massively debased since 2009 with a big debasing event over Covid and that OPEC has stuck to its $75 floor all that time, raw petrol is barely any more expensive than back when it was hovering around £1!!!! It's one of those metrics that tends to highlight how general wages haven't kept pace with currency devaluations.

[anonymous-user]

volvos60s60 said:

monthefish said:

From page 1 (only 3 months ago!!)

Joey Deacon said:

I have said it before, but I am amazed people haven't started to hoard cars such as the VW UP!, cars with £30 annual road tax and can do 60MPG.

Surely fuel is going to be in the £1.70 to £1.80 range in a couple of weeks?

&

Not sure people are seeing the benefit of running a car that costs buttons just yet. My Toyota iQ, which is free road tax and 60 mpg, has been for sale on PH for a while & no enquiries. Maybe I'll just keep it as i quite like it & it's pocket money to run

Clearly fuel costs are not high enough yet then, I also wonder if a large percentage of people will never downgrade their car for fear that people will think they have hit hard times?

I do wonder if people will be thinking "From my cold, dead hands" when it comes to their big SUVs and will never willingly get rid of them all the time they have money to buy fuel, even if it means cutting back on other things.

I actually have a shed diesel that does 60 MPG+ and has £30 road tax that I am getting rid of soon. Wondering if I should store it away for when fuel hits £3 or £4 a litre as I don't think there are many cars that are cheaper to run. I wonder how many people will still be happy with their SUVs when it is costing them £250+ to fill up?

Edited by anonymous-user on Thursday 23 June 12:40

[okgo]

As also said pages and pages ago. For most people despite these HUGE percentage jumps, it really isn't that much money being talked about unless you're doing a lot of miles.

[menousername]

I think the answer is somewhere between image, needing something that can deal with the woeful state of our roads, practicality (v small car) and people not having any money (nothing new)

I recently tried to sell something in the 12-14k range that, if at a dealer, would I have no doubt sell within a week. Hundreds of views, but only two enquiries both offering cheekily low opportunistic money, one of which was a trade buyer

However, I think its also wait and see time. No point trading if the cost to change cancels out any fuel savings, and what if prices pull back even a bit



ETA- What I mean is I think the market will freeze up for a while

Edited by menousername on Thursday 23 June 12:46

[GetCarter]

Joey Deacon said:

I do wonder if people will be thinking "From my cold, dead hands" when it comes to their big SUVs and will never willingly get rid of them all the time they have money to buy fuel, even if it means cutting back on other things.

Edited by Joey Deacon on Thursday 23 June 12:40

I have a big Hybrid SUV, currently getting 420+ mpg, so I won't get rid yet.

And no, I can't go fully electric due to where I live. Lots try it when they come up here and many end up getting the AA out to jump start their fully dead EVs.

[Otispunkmeyer]

Snappy89 said:

BUG4LIFE said:

Has probably been asked on here before, but are we going to see a big reduction in the future, or is near £2.00 a litre the ‘new norm’?!

I don't think we'll ever see prices below the 1.50-1.60 mark again. But take into account that rapid deflation can also be just as harmful to an economy, so there won't be an appetite to push the prices down on anything too quickly. Deflation means nobody spends any money because "it'll be cheaper next week" etc.

That being said, I had noticed a garage about 8 miles from my home. The price of E10 at least went from 189.9 down to 186.9. Anecdotal but it's the first garage I've seen drop their price of any type of fuel.

surely doesn't work that well with fuel?

I mean new TV? sure, it'll be cheaper next week, next month. But tomorrow I still need to go to work and since there is no public transport to get me there in anything like reasonable time and cost, I'll take the car and therefore I will need fuel. I can't wait till next week for it to be cheaper.

[DonkeyApple]

okgo said:

As also said pages and pages ago. For most people despite these HUGE percentage jumps, it really isn't that much money being talked about unless you're doing a lot of miles.

That's the key. Post 2010 saw a monumental shift to more efficient cars. Since then car usuale has been falling. Add in just how much car usage is non essential and can be easily cut and finally the sheer numbers now doing WFH 1.2 even 5 days a week and you start to see why average motorway speeds don't appear to have changed at all or why there is any great need for the Govt to give anything to drivers in the face of genuine issues such as rent increases, basic food costs and the looming and rather potent heating costs. If one has limits as to which areas to financially support then private motorists are pretty much not on any core list of priorities.

If one looks at this from the perspective of average daily miles covered by car in the U.K. then paying 40p/litre more than pre lockdown equates to pennies and easily absorbed through a simple change of habits.

In terms of personal transport and with the exception of some genuine outliers, it's a genuine non issue in contrast to other matters.

[anonymous-user]

Jawls said:

Mr Spoon said:

Jawls said:

Mr Spoon said:

Ankh87 said:

They could easily knock off 20p but they won't.

And that goes straight into the oil companies pockets. Even with a 50p government reduction it will be the same

What? A major duty reduction would quickly filter through and not just “go into the oil company pockets”. The price notifications I’ve seen at wholesaler level explicitly have duty split out, so not like it could be hidden.

In this industry 5p is a major reduction. But of course I will be wrong. So lets go with your idea

I’m not in the industry any more so I’m not in the detail of the recent numbers, but I strongly suspect there was a Platts price move in the other direction at the same time.

I’m just telling you how price notifications worked. So the purchaser gets a mail that says what their price that day will be, and duty is explicitly split out. So you couldn’t do any shenanigans there.

That is quite a naive statement to make. Platts is just one method of pricing. Force Majeure can be triggered with any shift like that, causing price rises

It depends what you did in the industry, but I've been buying tens of millions in distribution fuel for quite some time. Let me make this statement again. The government can remove all the fuel duty and it doesn't mean prices will fall. There might be some media led attacks for this to happen, but fuel is like houses. Once the industry can see that the common public are paying these prices, there is no incentive whatsoever for any reduction.

Think SDLT removal. All of a sudden, everything was SDLT more expensive.