Oil prices dropping, why not fuel?

N9eav

Oil has hit it's lowest wholesale price in years. So why are fuel companies holding back the reductions? Or do we need to wait until they buy up new stock?

Hintza

They are. (But there is also a a time lag)

torbrex

Its the same old story
As the price of the raw material goes up the price of the end product also goes up and the time lag is negligable but as the price comes down we have to wait for all the old stock to be used up before the price to the customer will drop.

We see this trick used everywhere in the fuel industry, oil, gas, electric, etc. the end user always has to pay extra while the producers and middlemen reap the profits of the flutuations in the market.

fivetide

Also a credit issue/general rising costs.

Put this in another thread but the currency markets aren't helping etc etc etc

http://www.guardian.co.uk/money/2012/jan/18/petrol-prices-rise-demand-falls

5t.

Trebor16

Ah, a story from six months ago, that barely mentions the relationship of the pound and the dollar and makes little mention of what happens when the oil price drops spectacularly. A useful contribution.