Drop in fuel prices

RichardD1970

I'm paying 97.7 for diesel at my local Asda and Morrisons.

http://www.petrolprices.com/search.html?search=B761XL&category=Geographical

AdrianC

agarnett wrote: »

It's a very firm cartel floor for the pricepoint at the moment is it not?

No.

How otherwise can it have become so consistent right across the country?

You are aware that there's a very tiny handful of refineries and regional distribution depots that supply all fuel to all brands, right?

And that the primary driver of fuel prices is the global oil market?

That's the point you see. Right now I am sitting in one such. The fuel duty on petrol is much the same as UK but last night I could fill up at about 92.7p/l.
...
Now, if I tell you that the typical minimum wage (there is no national minimum) in this country I'm sat in today is around 100% higher than in UK then does that begin to answer your affordability question?

Congratulations, you've managed to find one of the few that's cheaper in affordability terms than the UK.

and infrastructure that works when it snows!

Yes, Scandinavia gets a lot more snow than the UK, so it does make sense to have all the equipment purchased and available. In the UK, it'd be a colossal waste of money.

Nick_C

Actually, not everywhere is charging the same price. Within 10 miles of my home, the ten cheapest stations range from 99.9 to 101.9.

The 4 charging 99.9 are all big supermarkets. The six charging 101.9 are BP, Esso, Jet, and an independant.

I think what is happening here is that the supermarkets have got rid of regional variations and some of them are selling at break even (or possibly even a loss) in the hope that people will visit the store as well as the petrol station.

agarnett

AdrianC wrote:

You are aware that there's a very tiny handful of refineries and regional distribution depots that supply all fuel to all brands, right?

And that the primary driver of fuel prices is the global oil market?

Er so you are confirming that despite a population 10x the country I am in right now, that the cartel is alive and well and keeping its prices nailed via restricting the effect of the global oil market on refinery gate price in UK, despite the primary driver of fuel prices in Scandinavia which is the global oil market being free to work its magic? So you're confirming a fraud? One admittedly I guess not quite as serious as that conducted by the world's biggest investment banks and ratings agencies over the real worth of sub-prime mortgages, but a fraudulent manipulation using monopolistic control of a tiny handful of refineries, right? :rotfl:

Have you reported what you know to the Competition and Markets Authority or is it common knowledge?

Nick_C wrote: »

I think what is happening here is that the supermarkets have got rid of regional variations and some of them are selling at break even (or possibly even a loss) in the hope that people will visit the store as well as the petrol station.

:rotfl:

Break even? Give me a break!

AdrianC

agarnett wrote: »

Er so you are confirming that the cartel is alive and well in UK

No...

despite the primary driver of fuel prices in Scandinavia which is the global oil market?

Just as it is here.

OK, so - in Denmark, where I presume you are, what sort of spread of fuel prices are there from supermarkets out, excluding motorways?

agarnett

What particular spread of fuel prices are you getting at - geographic or between brands? I've driven from Skagen to Flensborg and from Esbjerg to Copenhagen - all the fuel stations have constantly moving prices, up to three or four times a day at every station, generally all a few percentage points cheaper after European markets close at night, and increasing again around 10am in the morning. Supermarkets in Denmark do not generally sell petrol although I guess a few are trying their hand!

I don't know what actual small changes in which markets the multiple daily fluctuations represent but there's no way I can predict the actual price of one brand from the prices of the others. It looks honest to me. For a while I thought Statoils Ingo branded unmanned stations (lots in Denmark are unmanned) was always the cheapest, a bit like Asda took a stint at in the UK, and so did Shell and Esso in previous years. However, it could be any of three or four brands that are cheapest here on any particular night. The price never stays the same two days running at any fuel station. And none of this nonsense where the third digit is always .7 or .9. All the LEDs on the sign get used in Denmark even for the third digit!!!

Does that answer your question?

AdrianC

agarnett wrote: »

What's the spread of fuel prices got to do with it?

Oh, I'm sorry. I thought you were suggesting criminal fraud was being committed by the UK oil companies fixing prices, since prices were all very similar. If that was what you were meaning, then the reason for asking that question ought to be fairly obvious.

If that's not what you were saying, then perhaps you'd like to explain again slowly what you meant by "cartel"?

agarnett

AdrianC wrote: »

Oh, I'm sorry. I thought you were suggesting criminal fraud was being committed by the UK oil companies fixing prices, since prices were all very similar. If that was what you were meaning, then the reason for asking that question ought to be fairly obvious.

If that's not what you were saying, then perhaps you'd like to explain again slowly what you meant by "cartel"?

Sorry you will see that my question was edited so rephrased before you re-posted, as it was badly put. My bad.

I am most definitely suggesting fraud through price-fixing and yes fraud is a criminal offence. Trouble is we don't have a government that wants to prosecute, and I guess that's mostly because they have an electorate that are involved in so many types of fraud in their own day jobs now (in financial services it is rife) that a large part of the electorate don't see the wrong themselves!

I mean cartel in the unlawful sense of the word (is there any other sense?)

AdrianC

A quick look at petrolprices.com tells me that petrol in my nearest big town ranges from 99.9p to 103.9p and diesel from 97.7p to 102.9p. Diesel is 105.9p, apparently, at my nearest filling station.

Effective cartel.

agarnett

You know I have highlighted the unusually level and consistent floor price, Adrian. Its a fact and can't be denied. It's unusual so I have highlighted it. You are of course in denial. Your prerogative.

Pointing at a local sign price spread is no defense to the allegation of a cartel especially if the high prices you've chosen are BP or a small retailer. I can bet my bottom dollar they aren't Asda, Sainsbury, Tesco, Morrison, Shell or Esso can I not? You've said yourself that the fuel all comes from the same tiny handful of refineries. The retailers are represented by a common body they call the UK Petrol Retailers Consortium* last time I saw their man spouting on tv. Is that still the same? Why do they need that kind of representation if they are not moving as one?

Naturally the biggest volume of fuel is sold where the price is at the floor price. Habitually you can see that the brands have taken it in turns to always be cheapest by a small amount. I think Asda have been in that spot for a few years now. A few years before that it was actually Shell. Esso had a stint I recall. Not just a day or two, a few years! That's unreal when you consider there is effectively no difference in what they are selling that anyone other than a forensic scientist could actually measure! A punter can't measure it. He thinks he can, but even if he's right, he can't put a price on it although of course our petrol-head punters do try hard to justify what they buy!

Asda Isle of Dogs in London was perhaps until recently always the place the tv cameras were invited when there was an announcement of a "fuel price war"! If there was a new floor price, they'd show it there first. Currently though the major supermarkets this last week or so seem to have chosen not only to present very very similar floor prices to their competitors, but to present the exact same floor price right across the country? Have you not been out cross country and noticed it?

I conclude there's only one reason for it - that's to keep the price way higher than it needs to be for them to make a reasonable profit.

There is part of the retail consumer market of course who will always be taken in by the strange BP quality/loyalty thing, or the special premium blend offerings - as the V-Power story earlier well indicated - so there's still plenty of suckers who can be tempted to take their eye off the money-saving ball. That part of the "spread" is still there.

But what about the lack of fluctuation of pump price which we tolerate in UK? Why does it stay the same for days? Given the massive daily drops we've experienced in wholesale price, is that not signalling unfair price-fixing in itself?

* Petrol Retailers Consortium - Wahay! Is that now a Googlewhack?!! How come there's just one reference left to it on the whole WWW??