Why are petrol prices so high?

Money_Grabber13579

As I write this, oil is about $105 a barrel and petrol is 164.9p a litre (where I am).

Just before the start of the Iran war, I filled up at 120.9p per litre although I accept the price was more commonly 124.9p at that time. Oil was about $65 dollars a barrel at that time.

The price of oil has therefore risen $40 a barrel and petrol prices have risen over 40p per litre.

Experts keep telling us that a $10 increase in the price of a barrel of oil causes a 7p increase in fuel prices at the pumps. So are petrol prices now 12p litre higher than they should be? Or are the experts just wrong?

Maybe it is the latter because they also tell us that there is a 2 week lag before prices hit the pumps but the increases this week have been almost instant.

Surrey1966

With fuel (both petrol and diesel) part of the cost is the fuel duty at 52.9p per litre. Also, whatever the overall price is, that includes 20% VAT on the total pump price. So at your figure of 164.9 per litre, in my very rough calculation:

93.5p = Fuel price before tax/duty

18.7p= VAT

52.9p= fuel duty

£1.651 total

So whatever the petrol price is, the current minimum in duty and VAT is about 71.6p per litre.

MDMD

There’s a breakdown here based on a 168.3p price

https://www.racfoundation.org/data/uk-daily-fuel-table-with-breakdown

Percentage of the pump price that is duty, VAT & environmental taxes/fees makes up about 48.9%

MACKEM99

Tax and VAT.

born_again

Someone has to make a profit.

If you are not happy then a EV is the perfect solution, as millions of people around the world have found out😍 . Even not being able to charge at home can work out cheaper when prices rise.

Ectophile

It's not just the price of crude oil. The whole fuel supply chain is messed up at the moment. If crude oil can't get to the refineries, then the refineries can't produce petrol and diesel. Different refineries are set up for different grades of crude oil, and can't switch easily. That's particularly affecting the supply of diesel, which is why diesel is so expensive.

LightFlare

someone has to transport the fuel to the forecourt which is more expensive

Fuel costs affect virtually everything we consume - hence why prices are rising as well for all sorts of goods and services

oldagetraveller1

And just think of all that extra V.A.T. the Gov. are raking in.😎

daveyjp

https://forums.moneysavingexpert.com/discussion/comment/82134231#Comment_82134231

Offset by the loss in VAT from buyers not spending money because fuel has increased in cost.

Mildly_Miffed

Bear in mind that the fuel duty has been frozen since 2011.

Petrol - 171-172 round here, diesel - 196ish.

eskbanker

https://forums.moneysavingexpert.com/discussion/6683022/why-are-petrol-prices-so-high

Another way of looking at those figures would be that oil increased by 62% but petrol only went up by 36%…