Petrol prices- when does the madness end?
Discussion
petop said:
rallycross said:
I’m finding it painful paying £10 a gallon especially when 80-90-% of it is going to the government .
But thats not really relevant....or correct. If it was £1.20 (including the 5% reduction which really didnt have any effect) the same amount is taken as you say by the Government. Ignore the 20% VAT though as its standard for most things we buy. So if you look at £1.99 only 50p or so goes to the Government. Include Duty and VAT its around 45%.
Its the wholsale price for refining and supply which is the other majority of the cost so blame the oil companies.
Edited by petop on Thursday 23 June 20:51
TX.
DonkeyApple said:
Just saw this:
https://uk.finance.yahoo.com/news/45-britons-cut-b...
45% of Britons cut back on journeys due to soaring fuel costs – ONS
Another blow for the leisure industry then. Especially those places where you need to travel to get to them.https://uk.finance.yahoo.com/news/45-britons-cut-b...
45% of Britons cut back on journeys due to soaring fuel costs – ONS
I'm lucky enough to work from home so car fuel prices make negligible different to my monthly outgoings now but it still stings having to get near or into triple figures to get a full tank even if it does last me a few months. For all the people still commuting regularly, I can imagine this being a bigger and bigger issue with no end in sight to fuel prices rising.
RazerSauber said:
DonkeyApple said:
Just saw this:
https://uk.finance.yahoo.com/news/45-britons-cut-b...
45% of Britons cut back on journeys due to soaring fuel costs – ONS
Another blow for the leisure industry then. Especially those places where you need to travel to get to them.https://uk.finance.yahoo.com/news/45-britons-cut-b...
45% of Britons cut back on journeys due to soaring fuel costs – ONS
I'm lucky enough to work from home so car fuel prices make negligible different to my monthly outgoings now but it still stings having to get near or into triple figures to get a full tank even if it does last me a few months. For all the people still commuting regularly, I can imagine this being a bigger and bigger issue with no end in sight to fuel prices rising.
However, let's consider some realities for a moment. What are we actually talking about here? Do we mean 5/10 miles drives for a night out? How much fuel is that going to use? 1 litre? So 50p more. Not really relevant. Especially when one considers that the costs of the actual leisure event is likely to have risen many pounds.
Do we mean a weekend trip somewhere? Again you're only talking a few pounds. Same even for the annual holiday etc.
Conversely, many people will be seeing winter heating bills increase by more than the entire cost of that summer holiday.
And 'no end in sight for fuel rises' is dramatic doris panicking to be honest. A little like the earlier post talking about £4/litre. Where is the logical reasoning for even beginning to entertain such a view? Oil prices are over $60 and guaranteed to remain there so all projects underway to bring wells back on stream will carry on so supply will increase. Saudi have already retarded sales as much as they dare after two years of not earning enough to pay off the loons who want to chop the heads of the royal family off and get the oil money for themselves. Russia has to sell as much as possible to keep its economy afloat. And on the demand side, there is a global economic slowdown underway so demand for oil is weakening and any sustained price rises from here will speed up that demand decline. And ultimately, the US can lift the blockade of Venezuelan or Iranian oil if really needed.
Don't they just report fuel prices in the media as they are always visible and people visit them daily/weekly. ie it's simply the best way to report, get hits for the overall energy rising story.
They've done the electric and gas DD rises reporting but they are monthly and so now have less impact?
On the radio recently there was a whole report on council swimming pools being forced to close or at risk of closure, all businesses with a high energy cost proportion will be impacted hard, inflationary prices that people will perhaps walk away from. So swimming pools being an obvious one, people can exercise in other ways, rather than pay extra or swim in a colder pool? There was even talk of Chlorine shortages?
I think there are a lot of people with high cash reserves and so are still relatively unaffected but there is a risk of a trickle effect over time?
They've done the electric and gas DD rises reporting but they are monthly and so now have less impact?
On the radio recently there was a whole report on council swimming pools being forced to close or at risk of closure, all businesses with a high energy cost proportion will be impacted hard, inflationary prices that people will perhaps walk away from. So swimming pools being an obvious one, people can exercise in other ways, rather than pay extra or swim in a colder pool? There was even talk of Chlorine shortages?
I think there are a lot of people with high cash reserves and so are still relatively unaffected but there is a risk of a trickle effect over time?
Edited by Scootersp on Friday 24th June 15:10
DonkeyApple said:
Mr Spoon said:
OPEC are the most relevant thing to this situation. And you know that also.
It depends on your view of recent. Last two years this has happened.
What about valero just shutting the taps off to keep the prices rising?
Do I need to mention essar and Kingsbury?
Aren't you arguing about U.K. domestic taxation and if it were removed that the refineries would instantly increase their prices to replace it in a monumental act of profiteering?It depends on your view of recent. Last two years this has happened.
What about valero just shutting the taps off to keep the prices rising?
Do I need to mention essar and Kingsbury?
OPEC is of no relevance in that argument, nor is anything to do with the underlying price of the raw materials. It's a view that competitive industry would somehow be able to replace a tax with a profit premium without the need for collusion or any consumer retaliation.
Which, in my opinion, is utter poppycock and quite a random opinion without any contextual basis.
Regarding a "monumental act of profiteering:", thats not my argument. It won't be profiteering, it will be the price that the product costs.
Mr Spoon said:
if you fail to see why OPEC are relevant to the reduction of UK taxation and the price of fuel then it won't be worth my time to try and explain.
Regarding a "monumental act of profiteering:", thats not my argument. It won't be profiteering, it will be the price that the product costs.
Please do elaborate on the relevance of OPEC with regards to the theoretical discussion of U.K. forecourt pricing in the event of all taxes being removed. Feel free to reference against comparable Western economies with fuel tax disparity to the U.K. also. Regarding a "monumental act of profiteering:", thats not my argument. It won't be profiteering, it will be the price that the product costs.
Please also feel free to elaborate on the mechanism that would be used to replace that U.K. local taxation with elevated raw material costs at the refinery in the absence of monumental profiteering and price collusion.
Genuinely interested as I am very clearly missing an extremely large and blatantly obvious element of the puzzle here.
Just saw this:
https://uk.finance.yahoo.com/news/45-britons-cut-b...
45% of Britons cut back on journeys due to soaring fuel costs – ONS
https://uk.finance.yahoo.com/news/45-britons-cut-b...
45% of Britons cut back on journeys due to soaring fuel costs – ONS
Scootersp said:
Don't they just report fuel prices in the media as they are always visible and people visit them daily/weekly. ie it's simply the best way to report, get hits for the overall energy rising story.
They've done the electric and gas DD rises reporting but they are monthly and so now have less impact?
On the radio recently there was a whole report on council swimming pools being forced to close or at risk of closure, all businesses with a high energy cost proportion will be impacted hard, inflationary prices that people will perhaps walk away from. So swimming pools being an obvious one, people can exercise in other ways, rather than pay extra or swim in a colder pool? There was even talk of Chlorine shortages?
I think there are a lot of people with high cash reserves and so are still relatively unaffected but there is a risk of a trickle effect over time?
I believe there is a lot of truth in that. The price of petrol is displayed on every main road in the U.K. and anything to do with cars is an easy target to whip up a mob of pant soiled angries. They've done the electric and gas DD rises reporting but they are monthly and so now have less impact?
On the radio recently there was a whole report on council swimming pools being forced to close or at risk of closure, all businesses with a high energy cost proportion will be impacted hard, inflationary prices that people will perhaps walk away from. So swimming pools being an obvious one, people can exercise in other ways, rather than pay extra or swim in a colder pool? There was even talk of Chlorine shortages?
I think there are a lot of people with high cash reserves and so are still relatively unaffected but there is a risk of a trickle effect over time?
Edited by Scootersp on Friday 24th June 15:10
As for swimming pools, those bills are going to be painful bit the edge can be taken off by turning the water temp down to below that of a jacuzzi and suggesting customers swim faster to keep warm.
. Our local pool is comically hot and not at all suitable for any exercise use. DonkeyApple said:
mikey_b said:
DonkeyApple said:
Indeed it would be on a low salary but the point is that not every car user is in a low salary, not every car user is doing above average mileage and nearly all car users have elasticity in their usage etc. some people won't have opted for the most frugal vehicle and that is no one's particular issue bar the person who made that choice. And then one has to consider that a lot of the higher mileage drivers have allowances etc, this is why, of all the current pricing pressures this one is the most benign.
You keep saying that there is a lot of elasticity in usage, but I’m not at all convinced that’s true. If it was, then with fuel so expensive relative to the recent past then we would be seeing less traffic in the roads. But in my experience the levels of traffic and congestion are much the same as normal, which suggests that most people are using their cars not for the fun of it, but because they need to make the journey that way.Even on the most basic level, most car users can compensate for fuel inflation, if they wish to by easing back on the loud pedal. This is less relevant today because so many cars are efficient diesels and drivers have already slowed down since the credit crunch over a decade ago. Just cutting a few non essential journeys will compensate for many and you'd wouldn't necessarily notice that unless you happened to be on the road at the right time and place where that change is more prominent. For example, you wouldn't expect to see a change when commuting per se but you might being able to perceive lower traffic in retail car parks during peak leisure shopping times.
You also have to consider that a very large number of car users aren't really affected by the price rises. They have efficient cars, don't use them heavily and have income and savings sufficient to not inspire any change in habit.
Another way to try and visualise this elasticity is to remember that road traffic always increases in urban and suburban environs when it rains and it increases in winter. That's the most overt display of some of the elasticity being exercised.
And all of this is before we consider the more extreme elasticities of last resort such as car sharing or public transport which we fully appreciate is generally the last actions we would want to take because the car, on our own is infinitely more pleasurable.
We can also consider some very basic numbers such as the average annual car mileage being about 7000. We can obviously appreciate that there are users who do more than that but obviously there are users who do less. At a typical 40mpg that implies an average annual purchase of 800 litres? At £1.40 that's an annual cost of £1100. At £2 that goes up by £500 or £1.40/day.
£1.40/day. Less than a coffee, a little more than a bottle of water.
In the cold light of day, this is not enough of an increase to change the habits of almost anyone.
If the average motorist is consuming 800 litres a year the duty/tax at 86p per litre times 30 million+ cars in the UK works out at about £400M per week (according to my trusty old abacus) so am surprised he hasn't further reduced the duty, maybe it's a cunning ploy to cover the cost of the domestic energy rebates announced last month which recently seem to have morphed into an all inclusive energy support package to cover petrol and diesel and not just gas and electric, there again if the average mileage is on the decrease the revenue will also decrease, wonder where the prices will stabilise at?
DonkeyApple said:
Just saw this:
https://uk.finance.yahoo.com/news/45-britons-cut-b...
45% of Britons cut back on journeys due to soaring fuel costs – ONS
You posted the same thing at 1pm. You got a fault with your time machine again?https://uk.finance.yahoo.com/news/45-britons-cut-b...
45% of Britons cut back on journeys due to soaring fuel costs – ONS
Gladers01 said:
The increased vat cost alone has negated the earlier 5p duty reduction by the chancellor.
If the average motorist is consuming 800 litres a year the duty/tax at 86p per litre times 30 million+ cars in the UK works out at about £400M per week (according to my trusty old abacus) so am surprised he hasn't further reduced the duty, maybe it's a cunning ploy to cover the cost of the domestic energy rebates announced last month which recently seem to have morphed into an all inclusive energy support package to cover petrol and diesel and not just gas and electric, there again if the average mileage is on the decrease the revenue will also decrease, wonder where the prices will stabilise at?
It's an interesting one. The earlier duty cut, we can safely, argue was more than covered by the underlying price rises. What we won't actually know for some time is whether since then the tax take has increased or fallen. We know all too well that the tax per litre has risen but we also know that the number of litres being bought has decreased. As such, we have to wait for sales figures to have a genuine picture. If the average motorist is consuming 800 litres a year the duty/tax at 86p per litre times 30 million+ cars in the UK works out at about £400M per week (according to my trusty old abacus) so am surprised he hasn't further reduced the duty, maybe it's a cunning ploy to cover the cost of the domestic energy rebates announced last month which recently seem to have morphed into an all inclusive energy support package to cover petrol and diesel and not just gas and electric, there again if the average mileage is on the decrease the revenue will also decrease, wonder where the prices will stabilise at?
As for the £400m/week rough calc, just think how much revenue was lost during the lockdowns! It's an important tax for keeping the lights on in the U.K. as well as for paying off the pensioner army.
Smiljan said:
DonkeyApple said:
Just saw this:
https://uk.finance.yahoo.com/news/45-britons-cut-b...
45% of Britons cut back on journeys due to soaring fuel costs – ONS
You posted the same thing at 1pm. You got a fault with your time machine again?https://uk.finance.yahoo.com/news/45-britons-cut-b...
45% of Britons cut back on journeys due to soaring fuel costs – ONS
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