Clueless journalists claim $250 oil would mean £2.30 petrol

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Conor wrote: »

Doesn't work like that. The price per litre has more to do with what they companies think they can get away with charging than the price of the crude component of a litre. It's also not a governmental creation at all but is in fact the creation of investors and speculators.

I agree with that Conor, it has little to with the cost of crude oil, it is all about how much they think they can get away with, simple maths doesn't come in to the equation.

I would say that the " Clueless Journalist " is about spot on.

Pew_Pew_Pew_Lasers!

meester wrote: »

For most the least 30 years fuel price movements have been almost entirely due to tax and not at all due to the cost of oil. It is only the last couple of years where the movement in the cost of oil has been noticeable in the pump price; but the percentage increase is only about 25%, which is very low considering oil is more than six times its low of a few years ago.

Read what I said again.

Conor_3

meester wrote: »

Not sure what you are talking about. It's a simple indisputable fact that most of the price of petrol is tax.

Is wrong. Tax, with the exception of the VAT component, is at a fixed price per litre and doesn't increase as the price increases. Out of the 30p/l that's gone on diesel in the last 12 months, only 5p of that has been tax in the form of VAT - the other 25p has gone straight to the oil companies.

meester

Idiophreak wrote: »

I'd love for the maths to be that simple, but I really don't believe it.

Just to clarify, though (I might be wrong)...for this to hold true, the 20p increases we've seen in the last couple of months would equate to a 100% rise in barrel cost - is this actually the case?

Edit: A little bit of reading indicated that the cost of a barrel earlier this year was around 100 - so for $30 increase in barrel cost we've got 20p extra on the pump - so for $120 you'd expect around 80p?

If you look at oil cost and petrol prices you have:

Feb 2003. Oil £19.20 barrel. Petrol (ex tax) 19.6p litre
July 2005. Oil £30.88 barrel. Petrol (ex tax) 28.4p litre
Aug 2006. Oil £40.13 barrel. Petrol (ex tax) 36.5p litre
November 2006. Oil £29.51. Petrol 26.1p
November 2007. Oil £43.48 Petrol 36.0p
April 2008. Oil £51.53. Petrol 41.7p
June 2008. Oil £64.59. Petrol 49.1p

Basically, £10 on a barrel of oil translates to 7-8p on pre-tax petrol price, so 9p-10p on the after-tax price.

moonrakerz

Conor wrote: »

Is wrong. Tax, with the exception of the VAT component, is at a fixed price per litre and doesn't increase as the price increases. Out of the 30p/l that's gone on diesel in the last 12 months, only 5p of that has been tax in the form of VAT - the other 25p has gone straight to the oil companies.

Your theory on pump fuel prices would be correct if the oil actually "belonged" to the oil companies in the first place. It's rather like saying that all the food in Tesco belongs to Tesco and that no one else is involved in the supply chain from the field to the shelf.

You have also ignored the fact that the oil companies are taxed proportionately on the cost of a barrel of oil so as oil increases in price the Govt takes more. This increase in tax is added to the pump price before the usual duty, VAT etc that we pay at the pump.

Conor_3

MX5huggy wrote: »

Not true petrol has to be one of the most competivley priced products, thats why the forcourt price tracks the crude price so closely,

Wrong. The RETAILERS cut is priced like that but not the suppliers. And if it tracks Crude so closely, why didn't we see a two day price drop when the price of crude dropped slightly the other week to $129 before rising again?

Conor_3

moonrakerz wrote: »

Your theory on pump fuel prices would be correct if the oil actually "belonged" to the oil companies in the first place. It's rather like saying that all the food in Tesco belongs to Tesco and that no one else is involved in the supply chain from the field to the shelf.

But it is BP, Shell and Conoco who are drilling it out of the ground and are selling it on the oil market to the refinery arms of their company. Don't tell me you think BP made £3 billion PROFIT in 3 months on petrol sales alone?

moonrakerz

Conor wrote: »

But it is BP, Shell and Conoco who are drilling it out of the ground and are selling it on the oil market to the refinery arms of their company. Don't tell me you think BP made £3 billion PROFIT in 3 months on petrol sales alone?

No I don't think they made £3 billion profit on petrol sales alone - you did !! You are completely wrong in saying that the oil companies make their profits from petrol sales - they don't !

Just look back at the profit reports for all the oil companies issued earlier this year, very little of their profit is "pump" based.

You argument is flawed: to use my previous analogy - you are saying that if Farmer Jones is making a fat profit selling his spuds to the wholesaler then Tesco should be selling those spuds to you at a loss, just because they make a huge profit selling cans of lager.

Conor wrote: »

BP, Shell and Conoco who are drilling it out of the ground and are selling it on the oil market to the refinery arms of their company

You are still perpetuating your own false premise that the oil belongs to the oil companies when they get it out of the ground. Do you really think that the Saudis, Iranians, Nigerians, etc, etc just let BP & Co just walk in help themselves to the oil ?
Your money is going to these people in the main, where did you think they get all the money they spend so lavishly from, Northern Rock ?