Petrol now 99.7p a litre

cepheus

Generali wrote: »

AIUI a large part of the variation comes from some people, especially but not only supermarkets, using petrol as a loss leader.

Anyway, the joy of the capitalist system is that if you don't like the price here, buy it there.

Yes and use any savings in extra fuel! In practice we are stuck around where we live or travel. What seems to be happening is that fuel is being forced down only in certain areas, whilst others try their luck with the ignorant motorist. This could be evidence that competition isn't working, but without knowing the base price I can't say for sure.

Generali

cepheus wrote: »

Yes and use any savings in extra fuel! In practice we are stuck around where we live or travel. What seems to be happening is that fuel is being forced down only in certain areas, whilst others try their luck with the ignorant motorist. This could be evidence that competition isn't working, but without knowing the base price I can't say for sure.

It is complicated I agree.

I can't imagine that there are significant numbers of people who only ever drive past a single petrol seller. For the odd individual stuck with the ability to only use one garage realistically it sucks but that won't have a significant impact on the market.

What is more interesting is how petrol prices seem to cluster in areas. There are often significant differences between different areas but little difference within a town or district. Some are for obvious reasons (e.g. the cost of land in central London must end up being reflected in the cost of fuel) but others seem odd, for example Wimbledon used to have petrol that was perhaps 5p/litre cheaper than Guildford.

I don't have an explanation as to why that is. Local cartels would tend to push prices to a similar figure but then market competition would also tend to have the same effect.

What I can say is that I'm yet to meet a petrol station owner that lights cigars with five pound notes so if gouging is going on they're not very good at it!

cepheus

Does anyone know what price of petrol is to the retailer at the present time, say for a typical sized outlet in a non rural area. It would be interesting to see how the profit margin varies as fuel prices rise or fall. The average in my area is 109.1p

Thrugelmir

cepheus wrote: »

How can they justify such a large variation in price across the country?

Delivery costs.

Nikkster

Generali wrote: »

What is more interesting is how petrol prices seem to cluster in areas. There are often significant differences between different areas but little difference within a town or district. Some are for obvious reasons (e.g. the cost of land in central London must end up being reflected in the cost of fuel) but others seem odd, for example Wimbledon used to have petrol that was perhaps 5p/litre cheaper than Guildford.

I've noticed that round here too - not as much as 5p/ L difference, but enough.

Seems to be that if there is an Asda in town the price is lower as they have a national pricing policy (which tends to be at the low end of the price range).

Generali

Thrugelmir wrote: »

Delivery costs.

Also land costs and the number of customers they can split the fixed costs across.

jjlandlord

The reason for price clusters in the same area is pretty obvious: No-one has an interest in a price war and thus they all align at close to the same price (not exactly the same otherwise the collusion would be too obvious).

cepheus

jjlandlord wrote: »

The reason for price clusters in the same area is pretty obvious: No-one has an interest in a price war and thus they all align at close to the same price (not exactly the same otherwise the collusion would be too obvious).

Exactly, that's why I'd like to see what the margin is.

Around the New Year the South West has recorded the lowest price for unleaded at 116.1 ppl. So I don't buy the delivery nonsense. It's a reason why small outlet prices in the country are consistently higher yes.

Quentin Wilson, said

Oil has reduced in price by 58% since June, yet petrol has only gone down 50% clearly someone in the value chain is making a profit

[I assume he means after tax]

however it says here

high levels of refinery-finished product stocks would delay the fall in the crude oil price making its way to the pump

http://www.bbc.co.uk/news/business-30783378

Thrugelmir

Generali wrote: »

Also land costs and the number of customers they can split the fixed costs across.

The further you live from a supply pipeline the cost increases. Tanker drivers are still highly paid. The vehicles are expensive pieces of kit to lease.

Generali

jjlandlord wrote: »

The reason for price clusters in the same area is pretty obvious: No-one has an interest in a price war and thus they all align at close to the same price (not exactly the same otherwise the collusion would be too obvious).

As I say, high levels of competition would have exactly the same impact and, as petrol station owners aren't conspicuously rich, if they are setting up cartels then they are lousy at it.