MSE News: Petrol prices set to fall further, says AA

fivetide

It's a fairly complicated process but the current high rates have been blamed on the weakening dollar so although the price is falling back it is tougher to get the currency conversions right. That and costs for exploration have been much higher since the Deepwater Horizon disaster, don't forget, it isn't just about getting it out of the ground, it is finding the stuff in the first place.

That said, the usual line is that the tax is too high and that forecourts make very little per litre.

Then there are the speculators on the futures markets buying off anticipated demand and driving up prices.

Demand for oil keeps going up. People have failed to grasp that being able to buy a pair of jeans for a fiver in Tesco has helped build up the economy of places like China and India and their demand for the black stuff has gone through the roof.

What you gain on the swings you lose on the roundabout as it were. Still, at the end of the day, the only person who loses out in all this is the consumer.

5t.

jobdone1

just to add to that if it was not for the supermarkets especially asda forcing prices down then prices would not come down this is why we need government action for the area's that do not have a supermarket fuel forecourt to force down the price that's inflated by the others you say you are paying £1.349 at Morrison lucky you my cheapest price within a 15 mile radius is £1.38.9 i think that speaks for its self if you have supermarket fuel your in pocket if not tough.

Trebor16

fivetide wrote: »

It's a fairly complicated process but the current high rates have been blamed on the weakening dollar so although the price is falling back it is tougher to get the currency conversions right.
5t.

The dollar was at the level of $2 to the pound in July 2008 but by March 2009 it had dipped to $1.42. By June 2009 it was back up to $1.63 but dipped again to $1.47 in June 2010. Since July 2010 it has been between $1.52 and $1.63. Between January 2011 and May 2012 it has varied between $1.57 and $1.63.

It is fair to say that over the last 18 months the value of the pound against the dollar has had a minimal effect on the price of petrol in the UK, given there has only been a fluctuation of 5-6% in the value of the pound against the dollar.

fivetide

jobdone1 wrote: »

just to add to that if it was not for the supermarkets especially asda forcing prices down then prices would not come down this is why we need government action for the area's that do not have a supermarket fuel forecourt to force down the price that's inflated by the others you say you are paying £1.349 at Morrison lucky you my cheapest price within a 15 mile radius is £1.38.9 i think that speaks for its self if you have supermarket fuel your in pocket if not tough.

Our cheapest prices are at the local Esso station (often better than Tesco/Morrisons).

Beyond that Shell don't seem as bad as some of the big companies with BP being the most expensive (based on the garages I pass each day).

When Diesel hits that sort of price difference (1.27.9p at Esso for petrol at the moment) it's a tricky balance between that and a frugal small petrol motor.

5t.

grizzly1911

fivetide wrote: »

When Diesel hits that sort of price difference (1.27.9p at Esso for petrol at the moment) it's a tricky balance between that and a frugal small petrol motor.

5t.

A 10p differential is around 8%, both or diesels 2.0D and 1.3D are both 20+ % better than their equivalents. So still some way to drift:eek:

I know my brother has just purchased a 107 and it will interesting to see how that pans out in reality. On HonestJohhn some of the small petrols struggle to achieve their promises and you do give up quite a bit (quality of life, gear changing) for other than round town jaunts.

Trebor16

grizzly1911 wrote: »

A 10p differential is around 8%, both or diesels 2.0D and 1.3D are both 20+ % better than their equivalents. So still some way to drift:eek:

I know my brother has just purchased a 107 and it will interesting to see how that pans out in reality. On HonestJohhn some of the small petrols struggle to achieve their promises and you do give up quite a bit (quality of life, gear changing) for other than round town jaunts.

The annual mileage will potentially have an impact too. 12000 miles on a diesel that averages 50mpg will cost £1473 (at £1.35 per litre which is the price at my nearest petrol station). On a petrol car at 40mpg it will cost £1759 (at £1.29 per litre, current local price). A small car that can match the economy of the diesel will cost £1407.

fivetide

grizzly1911 wrote: »

A 10p differential is around 8%, both or diesels 2.0D and 1.3D are both 20+ % better than their equivalents. So still some way to drift:eek:

I know my brother has just purchased a 107 and it will interesting to see how that pans out in reality. On HonestJohhn some of the small petrols struggle to achieve their promises and you do give up quite a bit (quality of life, gear changing) for other than round town jaunts.

Quite true but the point was a frugal wee car.

I think for anyone doing any real miles diesel will win out, plus most seem to need a good drive just to keep them healthy.

However, there are people who will buy a diesel simply because they expect better mpg and if you are doing less than average miles then it might be worth looking at a petrol.

New, the city cars like the Fiat 500 is going to hit that 50mpg mark if not the 70 it promises so it is tempting.

Even used, larger petrol engines tend to be a bit cheaper (might be worth digging into it a bit more) so there could be a saving there to take account of.

Swinging back in the diesel favour is the generally lower road tax though so again, potential saving even if servicing might be more expensive.

The basic point was, there are more options than ever, especially with some good punchy small engined cars out there and diesels no longer being the agricultural sounding units they used to be (although a Mondeo diesel did manged to leave behind a big black cloud accelerating away from the lights this afternoon!)

5t.

Notmyrealname

jobdone1 wrote: »

profit profit profit greed greed greed they continue to drag heels brent crude below $95 a barrel and i am still paying £1.38.9 a litre of diesel this should be in the low £1.20s

Blame the govt. The price is guaranteed to rise 3p a litre in August which has nothing to do with the oil companies.

Trebor16

Notmyrealname wrote: »

Blame the govt. The price is guaranteed to rise 3p a litre in August which has nothing to do with the oil companies.

That will boost the governments take with VAT to about 73p per litre. When I first moved here in March 2006 petrol was 84.9p per litre and diesel was 88.9p. It reached a high of £1.20 for unleaded and £1.30 for diesel in the summer of 2008 when oil reached its current record of $147 a barrel.

You may remember the oil price fell down to $40 a barrel after that and petrol dropped to 88.9 and diesel was 93.9, but with the current levels of duty on petrol even if oil dropped right down in price there is no way it will fall below £1 a litre.

fivetide

Notmyrealname wrote: »

Blame the govt. The price is guaranteed to rise 3p a litre in August which has nothing to do with the oil companies.

Quite right although we've had a funny thing in the last few years with most countries being in recession, usually leading to a drop in demand which should (all things being equal) lead to a drop in price - that's basic economics.

Trouble is, given the nature of it there has been a flight to commodities and courrencies seen as more secure, hence the dollar reference earlier. The price isn't just about what is happening in the UK, it is a global market with global supply.

There's a good article on all the intricacies here from The Guardian http://www.guardian.co.uk/money/2012/jan/18/petrol-prices-rise-demand-falls

5t.