Petrol prices vs Crude price

davew62

Someone has posted on FB the following

"In 2008 petrol was £1.04/L in the UK and crude was $140/barrel

Yesterday UK petrol was £1.70/L and crude $110/barrel.

This suggests someone is making over 66p/L profit.

Can anyone explain this huge discrepancy?

daveyjp

What about the inflation on the costs of producing fuel from crude and fuel station operating costs since 2008?

Car_54

daveyjp said:

What about the inflation on the costs of producing fuel from crude and fuel station operating costs since 2008?

Indeed. Shipping to the UK, labour, energy for refining, transport to the filling station, etc. all cost much more than in 2008.

davew62

Ah yes, thanks for the reply guys, never though about that

dipsomaniac

So why is crude usd30 cheaper than 14yrs ago if everything is more expensive to produce/transport? I am assuming because it's controlled by a cartel and not a proper market.

Tax makes up more than 50% of fuel price at the pump the next biggest factor is oil prices.  Futures and options are supposed to smooth out prices but I suspect some of the big cos are profiteering. Prices rise like a  rocket and fall like a feather

motorguy

davew62 said:

Ah yes, thanks for the reply guys, never though about that

More info on it here.

But basically the "fact" posted on facebook is wrong.  It quotes historic oil price and pump price from two different points in time.

https://fullfact.org/economy/road-fuel-prices-crude-oil-retailers/

On-the-coast

And… oil is priced in dollars.  Sterling fell heavily in 2008 v dollar - from nearly 2$ to pound to around 1.5.  And it’s even lower now…

mark_cycling00

I think this person is comparing the maximum crude price in 2008 ($140) on average it was only $98 and for much of the year it was much lower.
Then they use the lowest retail price on the forecourt in the whole 2008! Max price was £1.50 but as people point out costs, business rates etc are much higher now.

Maybe this person likes deceiving people... hmmm. People expose all their personality traits on facebook

Another way to look at the claim is to see how profitable the oil retailers are. As an example; domestic heating oil prices are very high now. DCC Ltd are the biggest supplier in UK+IRE. It's not a particularly profitable company. The share dividends are 3% whereas you get 5-6% on renewable energy companies like JLEN or greencoat wind

prowla

Erm, stating increased cost of transport of the fuel as a factor in the cost of fuel is a self-fulfilling argument, isn't it?