Petrol prices hit a new high

diable

How much is petrol per litre without Vat and Tax added to it as that will put the price into proportion.

MF2015

What gets me is today I went to fill up at the local Tesco in a small market town and it was 5p more than a station near my work in east London.

I'll be filling up there in future.

diable

Cleaver wrote: »

You could buy shares in a company in order to hedge against your travel costs. Shell, for example, are up about 13% over the last year and pay a nice dividend.

You'd always fill up at Shell then and at least you'd know that you were getting a bit of money back each time you filled up.

I bought BP went up 30%

nicko33

diable wrote: »

How much is petrol per litre without Vat and Tax added to it as that will put the price into proportion.

approx 50p per litre

PasturesNew

Cleaver wrote: »

You could buy shares in a company in order to hedge against your travel costs. Shell, for example, are up about 13% over the last year and pay a nice dividend.

You'd always fill up at Shell then and at least you'd know that you were getting a bit of money back each time you filled up.

Nice idea. Now, for us simple folk who have never owned a share, can we just walk through the maths? I used to wonder about doing this with water bills, so "how many shares would I need to buy to pay my water bill".

So, for petrol. I have to use Morrisons. So I found their dividend price.

http://www.morrisons.co.uk/corporate/investors/Shareholder-information/Dividend-history/

The numbers vary .... so then I figure I'll take the average dividend from the past 3 years, so (4.8+5.8+8.2)/3 = 6.26

I guess that means ... er, not sure. So, now I'll guess. I am guessing that means for every share I buy I'd get £6.26/year. (Is that right? Is that how it works?)

So, now to find out how much the shares are, which they give me... really out of my depth here now. http://www.morrisons.co.uk/corporate/investors/Detail-Share-Price/

Now, a share cost 270. £270? Or 270p? I'm guessing that's in pence.

So, if I buy a £2.70 share now, then in a year I'd get back £6.26. Is that right? No idea how any of this works. Hang on, no, that has to be maths fail. Some assumption's wrong, or maybe them all.

OK... it's best I stay as a non-share-owning type I guess... out of my depth. Lovely idea though.

I guess it might work/look right if a share is £270, which I dismissed earlier as nonsense. Maybe that's it.

So, buy one share at £270 and get back £6.26, which is 2.3%. So it'd be better to keep the money in a savings account at a higher rate.

I'm really not understanding this shares lark at all am I.

tomterm8

I don't think you should try to hedge in that way, because it's nothing like a true hedge. Buying any one stock runs the risk that the stock price could go down even as the price you pay for fuel goes up.

A unit trust would be better, but still not a true hedge.

FATBALLZ

What is going on with petrol prices at the moment... it seems like some petrol stations are profiteering because of the snow. The petrol station down the road from me was 118.9p a litre then a couple of snowy days later its 123.9p a litre. Meanwhile the station I usually fill up at is still 117.9p a litre.

FATBALLZ

tomterm8 wrote: »

I don't think you should try to hedge in that way, because it's nothing like a true hedge. Buying any one stock runs the risk that the stock price could go down even as the price you pay for fuel goes up.

A unit trust would be better, but still not a true hedge.

Is it possible to hedge against the effects of tax on the price of petrol? The oil companies don't make money out of it.

tomterm8

FATBALLZ wrote: »

Is it possible to hedge against the effects of tax on the price of petrol? The oil companies don't make money out of it.

Two answers: it is possible for really large companies to hedge against tax on the price of petrol, but it is not really possible for PasturesNew to do it.

FATBALLZ

By the way I liked the explanation of this on the radio earlier...

"Petrol prices have now hit an average of 121.7p a litre, although some garages are already charging this or more."