Island Petrol Prices and Oil Price At All Time High (in £)

Hintza

On Radio Scotland this morning there is a debate on fuel prices on the Islands where the government is due to start giving a 5p/litre cut in fuel prices however the petrol stations have ramped prices by 5p in the last week. There appears to be a big backlash brewing.

Had a quick look around and found a very interesting article on where next for Oil.

http://www.thisismoney.co.uk/money/markets/article-1658364/Oil-price-predictions-What-crude.html

colino

It is interesting that while the analysts were justifying on behalf of the oil companies the artificially high price of a barrel of oil, put down to overstocking to prevent disruption to supply if/when the Straits were cut off, before christmas; the reason the price of oil is so high, is that the oil companies have worked out they can basically charge what they like.
Oil users have been very reluctant to change their buying habits no matter the crazy prices charged, coupled to government rhetoric that tax add ons are only there to limit consumption and "greenify" the country.
Therefore, by selling slightly less of their commodity at hugely inflated prices, the oil companies make more profits by spending less on exploration and development, not the guff they spout about needing more money to exploit marginal fields and devise new technology to eek out supplies from abandoned sites.
As long as we keep on paying, they'll keep on shafting us.

Obukit

colino wrote: »

As long as we keep on paying, they'll keep on shafting us.

Not really true, oil is just the same as any other commodity - the price depends on levels of supply and demand. The problem with oil is that demand is relatively inelastic, and supply is largely controlled by OPEC who can engineer the price. But it is OPEC who do this, not the oil companies.

In the end, massive demand for a dwindling resource will only ever have prices heading in one direction, though. I remember all the shock when prices broke the £1/litre "psychological barrier".

pauletruth

you need to understand that fuel up here is not a matter of choice. gb oil company contantly maintain a 20p premium on fuel.
we knew they would do this its very typical of this firm. people forget that shetland and orkney are a lot bigger than they appear. its the same distance as driving from manchester to birmingham as it is from the south end to the northen end.
we have no compition they are the sole importer.

TrickyWicky

Obukit wrote: »

But it is OPEC who do this, not the oil companies.

They're both arch enemies too right? :rotfl:

dzug1

pauletruth wrote: »

you need to understand that fuel up here is not a matter of choice. gb oil company contantly maintain a 20p premium on fuel.
we knew they would do this its very typical of this firm. people forget that shetland and orkney are a lot bigger than they appear. its the same distance as driving from manchester to birmingham as it is from the south end to the northen end.
we have no compition they are the sole importer.

You have to ask yourself WHY there is no competition, the most likely reason is that the market isn't big enough and costs are too high to make it worth anyone's while to enter it even with a huge premium

scotsbob

It's a scandal. In the same week the government reduce prices by 5p, to help this rural area, the petrol companies increase it by 5p but only in the area benefitting from the subsidy