Fuel prices and the war in Iran/ Lebanon

facade

Pump prices always skyrocket upwards the instant that there is anything in the News affecting crude oil prices.

Meanwhile the likes of the RAC try to prevent panic buying by pointing out that the oil we use for the next 3 months has already been purchased, plus everything in the system was bought at the old prices.

On the other hand, if crude oil prices drop, it takes many months, if ever, for the price reduction to filter through to the pumps, because the oil for the next 3 months and everything in the system at the moment has already been purchased at the higher price…….

dredski

Thanks to @Woodstok2000 - I am, it may surprise some, not an idiot and fully understand the impact of crude oil prices increasing and its effect on petrol/ diesel prices.

What I'm saying is - petrol stations have supplies already so they already paid pre-price rise prices for the product so they are gouging customers it would seem.

They will continue to receive pre-price rise petrol until such time as the more expensive crude oil is refined and it feeds through to them - how long does that take?

Apologies for being too vague, I was expecting outrage at us being ripped off and no one in the media pointing it out 🙄

paul_c123

https://forums.moneysavingexpert.com/discussion/comment/81913002#Comment_81913002

There is no specific law against price gouging. There are anti-monopoly laws, so for example different fuel suppliers in a local geographical area can't cooperate to all raise prices at a specific time, or by a similar amount.

BUT there is now a requirement for fuel retailers to publicise their price changes within half an hour of doing so, to a government API.

This may have backfired, because all the fuel suppliers knew there was a golden opportunity to put the prices up sooner rather than later. It only took one supplier to "go first" and see what happens. They could add say, 3p to petrol and 6p to diesel, wait just over half an hour (or some other not-too-long timeframe) and see what their neighbours do.

And of course there is panic buying. Fuel suppliers, more than you or I, know exactly the rate they're selling fuel, so will see the start of a panic buying episode quickly and will be able to "quell" that rate by dynamically adjusting prices if they so wish. Which it what I think has happened here.

Altior

Do people realise how long wet stock lasts for in a regular filling station ?

MattMattMattUK

https://forums.moneysavingexpert.com/discussion/comment/81913002#Comment_81913002

It is not gouging, profiteering, ripped off, or any of the other terms people like to throw around.

Fuel retailers are not required to sell at a fixed margin, no matter how much the likes of the RAC like to portray when they say "Petrol should be £X per litre based on oil costs", they sell based on total cost of business and what the market price will sustain. When it comes to vehicle fuel demand is quite inelastic, people will cut back on other things but still need fuel, so the price is somewhat constrained by competition rather than demand. The cost is not just what they paid for it, it factors in the total cost of the businesses operations, including future stock replenishment, which will be at a higher rate.

Essentially petrol stations are not charities, they function as profit making entities, to expect otherwise is naive.

Altior

The super stuff lasts longer, but regular derv and petrol, you might stretch to four days in normal times. The wholesaler eg Shell will be charging you the higher prices instantly. Wet stock might as well be liquid gold lol. If you retail gold you don't value it in the price you bought it in on, and you don't sell it based on the original purchase cost. The valuations correlate with the market. The original cost is irrelevant, I might have 20K litres of petrol in one of my tanks and that might have had four different cost prices on delivery. The inventory value of that wet stock now is the last price Shell has invoiced me for regular petrol.

facade

I was expecting outrage at us being ripped off and no one in the media pointing it out 🙄

No point in being outraged. We either pay the higher prices or don't buy fuel.

Since most of us have been minimising our fuel usage for years, we just pay what the retailers demand.

Given that there are only a small handful of retailers, and they all watch each others prices and increase theirs to match, there isn't much we can do. (So much for that nonsense you were taught in school Business lessons about "competition bringing prices down")

(Like the "price matched to Aldi" labels in supermarkets, it just means if Aldi charge more, we will too- I'd definitely shop where the labels actually said "cheaper than Asda" 😉)

Many many years ago I worked as a petrol pump attendant at an independent garage.

The owner would listen to the Budget and as soon as the Fuel Duty increase was given, he'd run and increase the prices.

The increase used to be from 6PM, so all the fuel he could sell that afternoon before 6PM made him more profit.

Mildly_Miffed

Let's explain this simply…

You have a business that sells widgets.
You have five widgets in stock.
You normally pay £5 each, and sell for £7, but the wholesale price you buy them in at has risen, and to restock will cost you £9.

Do you sell them at £7 and make a loss on restocking, or do you put the sale price up?

eskbanker

I was expecting outrage at us being ripped off and no one in the media pointing it out

If it was call-and-response ragebaiting that you had in mind then you might find a more receptive audience on sites like Mail Online?

dredski

It would seem the UK chancellor agrees with me and while that might not be the greatest accolade, I'll take it.