Fuel Prices

[Parthiban]

I've got to admit I don't really fully understand how this all works so was wondering if there's anyone on here who does, works in the petroleum industry, or even on the commodities market............

What I don't get is how suddenly the prices are rising what seems to be every day? I've got back from being away for 2 weeks, and the prices round here have gone from 114.9 when I left to now being 122.9!

How exactly is the fuel price rising by what seems to be about 1p a day roughly and what is causing it? It's totally ridiculous, is the same thing happening all around the world as well?

[aaronabbott]

tax,tax,tax,tax,TAX

[Mike_B]

tax,tax,tax,tax,TAX

No, that's why it's so expensive in the first place, not why it's going up a penny a day.

Oil is $140 a barrel, take a look at this chart: Linkety-Link

That's why it's been shooting up lately...

[Scarlet Pimpernell]

Not necessarily tax...I read some article on What car's web site a few weeks ago.

There apparently has been some speak of mariners now having to use regular derv as opposed to marine fuel (something to do with greenhouse gases emissions). So heavy tankers are creating a new demand for diesel, hence it going up by so much. As far as petrol is concerned, the Arabs are not increasing production at the same rate of demand. Someone's gotta pay for the revolving hotels in Dubai!

Simple supply and demand, hence prices go up. China and India are possibly to blame for that - a barrell of crude now costs 3 times what it did just a short few years ago from what I read.

Tax only comes into play in this country with VAT. I think that the 70p per litre that government here takes hasn't gone up, but VAT on the total amount remains at 17.5%, so they get more money as the prices go up!!

[maneesh]

In a nutshell, the fall in the US dollar and speculators are the two biggest causes of the increase.

The president of OPEC is actually stating that the market is OVERsupplied with oil, and Libya is thinking of CUTTING oil production!

There are many parts of the chain from oil production and supply to when it finally reaches the pumps in our local petrol stations as unleaded.

Oh, and it's going to get WORSE before it gets better.

Have a read of today's article OPEC predicts 170 bucks a barrel

Yes, it is a GLOBAL crisis, not confined to Western Europe or North America.

"More than 3000 delegates, including leading corporate and political figures, will meet at the 19th World Petroleum Congress after last week's attempt by Saudi Arabia to reduce the cost of oil by boosting output among producer nations failed to agree on concerted action.

The president of the Organisation of the Petroleum Exporting Countries is expected to be joined in Madrid by the head of the International Energy Agency and ministers from Nigeria, Russia, Venezuela, India, France and the Netherlands. The bosses of oil giants ExxonMobil of the US, CNOOC of China, Britain's BP and Shell, Rosneft of Russia and Total of France are also expected to attend.

The rising cost of crude was not linked to supply, Mr Khelil said. "There is more than enough oil in the market to meet the international demand."

Khelil is the president of OPEC.

[maneesh]

Simple supply and demand, hence prices go up. China and India are possibly to blame for that - a barrell of crude now costs 3 times what it did just a short few years ago from what I read.

Tax only comes into play in this country with VAT. I think that the 70p per litre that government here takes hasn't gone up, but VAT on the total amount remains at 17.5%, so they get more money as the prices go up!!

Simple supply and demand?? Why did Brown travel to Jeddah for the summit? He believes it's a long term problem, and that in the short term, we must take steps to reduce the power that speculators have over the oil price.

53p per litre for fuel duty matey.

[Mike_B]

Simple supply and demand, hence prices go up. China and India are possibly to blame for that - a barrell of crude now costs 3 times what it did just a short few years ago from what I read.

It's a lot more than 3x - see this graph here: Linky

It goes back a bit further than we need for this thread, but the period 2001 - date shows a 7x increase in price, though demand certainly hasn't gone up that much. Oil has gone up 40% since the start of this year!

[dave1]

The total revenue extracted "directly" from fuel at the pumps (duty,VAT) is approximately 70p per litre(£3.18 per gallon) Since the consumer is buying from their after tax earnings, plus the fact that everyone concerned in the refining,delivery and sale of fuel in the UK is taxed, plus the tax paid by the oil companies, it would be very hard to come anywhere near putting an accurate figure on the total revenue that the industry supplies to this government. With the increases in oil prices it has been suggested by "experts" that the government could cut duty by 9p per litre(around 11p with the VAT) and still be taking at least as much tax as they were at the beginning of the year.

[WylieCoyote]

Global crisis or not, I have a friend in America and we were discussing the fuel prices and they're in uproar about the fuel cost reaching $4.15/gallon. That's way less than half ours. Why is our country penalised so much and we, like muppets, just sit and take it.

[Yaumeister]

Global crisis or not, I have a friend in America and we were discussing the fuel prices and they're in uproar about the fuel cost reaching $4.15/gallon. That's way less than half ours. Why is our country penalised so much and we, like muppets, just sit and take it.

A little , but when people are talking about gallons over here in UK (ie. mpg), is it US gallons or imperial gallons?

[maneesh]

Global crisis or not, I have a friend in America and we were discussing the fuel prices and they're in uproar about the fuel cost reaching $4.15/gallon. That's way less than half ours. Why is our country penalised so much and we, like muppets, just sit and take it.

Bit of an unfair comparison, the US economy is MASSIVE compared to the UK's economy, and they have a different approach to taxation, partly because they don't have a welfare state to support. You try living in the US without health insurance, and have a medical problem, and watch how you get treated! It's swings and roundabouts - the cost of fuel is only a single measure of quality of life. A much fairer comparison would be with countries in Western Europe, such as France and Germany.

It's all relative, fuel prices have gone up in US too, so obviously they are going to be hurting (from their perspective). The US population are much more pro-active, and lobbying is part of the political culture.

Don't have to sit and take it - what are YOU doing to CHANGE the situation?

There is always the alternative of Venezuela, they have the cheapest petrol in the world (as do most nations that don't need to import oil for car usage) , just 0.7pence per litre @Jan 2008.

[dave1]

Global crisis or not, I have a friend in America and we were discussing the fuel prices and they're in uproar about the fuel cost reaching $4.15/gallon. That's way less than half ours. Why is our country penalised so much and we, like muppets, just sit and take it.

A little , but when people are talking about gallons over here in UK (ie. mpg), is it US gallons or imperial gallons?

I always refer to UK gallons. A UK gallon is approximately 20% more than a US gallon in terms of content so your $4.15 cost is realistcally $5 / gallon UK, still considerably cheaper than here, but a lot of people dont realise how big the difference is between UK & US gallons.

[WylieCoyote]

Global crisis or not, I have a friend in America and we were discussing the fuel prices and they're in uproar about the fuel cost reaching $4.15/gallon. That's way less than half ours. Why is our country penalised so much and we, like muppets, just sit and take it.

Bit of an unfair comparison, the US economy is MASSIVE compared to the UK's economy, and they have a different approach to taxation, partly because they don't have a welfare state to support. You try living in the US without health insurance, and have a medical problem, and watch how you get treated! It's swings and roundabouts - the cost of fuel is only a single measure of quality of life. A much fairer comparison would be with countries in Western Europe, such as France and Germany.

It's all relative, fuel prices have gone up in US too, so obviously they are going to be hurting (from their perspective). The US population are much more pro-active, and lobbying is part of the political culture.

Don't have to sit and take it - what are YOU doing to CHANGE the situation?

There is always the alternative of Venezuela, they have the cheapest petrol in the world (as do most nations that don't need to import oil for car usage) , just 0.7pence per litre @Jan 2008.

Exactly. The people who go to work in this country do so so that those who don't want to work don't have to and get everything for free - from dole to health care.

And what do you suggest I do about it? Launch my own 1-man political protest? The only things one can do about it is to do exactly what the government want - either do nothing in which case you're still paying lots in petrol, or downsizing which helps their green strategy.

[Parthiban]

Ok, some interesting info there and thanks for all the replies, but I'm still a bit lost. Haven't oil prices always been on an upward trend? Yet in the past, fuel prices have never gone up almost every day?

Also even if the actual price of the petrol goes up, doesn't the price at each petrol station only go up when they have to buy in more petrol at a higher cost? How often to petrol stations buy in new petrol?

[maneesh]

Global crisis or not, I have a friend in America and we were discussing the fuel prices and they're in uproar about the fuel cost reaching $4.15/gallon. That's way less than half ours. Why is our country penalised so much and we, like muppets, just sit and take it.

Bit of an unfair comparison, the US economy is MASSIVE compared to the UK's economy, and they have a different approach to taxation, partly because they don't have a welfare state to support. You try living in the US without health insurance, and have a medical problem, and watch how you get treated! It's swings and roundabouts - the cost of fuel is only a single measure of quality of life. A much fairer comparison would be with countries in Western Europe, such as France and Germany.

It's all relative, fuel prices have gone up in US too, so obviously they are going to be hurting (from their perspective). The US population are much more pro-active, and lobbying is part of the political culture.

Don't have to sit and take it - what are YOU doing to CHANGE the situation?

There is always the alternative of Venezuela, they have the cheapest petrol in the world (as do most nations that don't need to import oil for car usage) , just 0.7pence per litre @Jan 2008.

Exactly. The people who go to work in this country do so so that those who don't want to work don't have to and get everything for free - from dole to health care.

And what do you suggest I do about it? Launch my own 1-man political protest? The only things one can do about it is to do exactly what the government want - either do nothing in which case you're still paying lots in petrol, or downsizing which helps their green strategy.

You refer to "free riders". However, there are many GENUINE people in this country who benefit from the welfare state. Just look at social services, mental health units and all the ancillary facilities that are available to those in need. What happens if you have a disabled child and you just can't care for the child 24 hours a day? The welfare state will step in and help out.

Yes, why not launch a 1 man political protest? Protests have to start somewhere. Why not write a letter to your MP? Why not get everyone you know to write a letter to your MP? There are many ways of airing your voice, be it via conventional channels or starting a riot.

An apathetic population will continue to be taken advantage of by any government, both here and abroad.

Protests have changed things in the past, and it starts from the ground up. I'm sure if the fuel price continues to rise, there may be more protests by hauliers and/or private motorists. If you don't feel like starting your own, I'm sure you can tag on to another group's protest.

The point I'm making is whinging will get us nowhere as a nation if we TRULY want change here. We are going to require action, and that has to start at the grassroots level, in the community.

[shake]

supply and demand...

plus we ****** off the countries who own/produce most of the oil.

either way we are fudged

[Mike_B]

Global crisis or not, I have a friend in America and we were discussing the fuel prices and they're in uproar about the fuel cost reaching $4.15/gallon. That's way less than half ours. Why is our country penalised so much and we, like muppets, just sit and take it.

Bit of an unfair comparison, the US economy is MASSIVE compared to the UK's economy, and they have a different approach to taxation, partly because they don't have a welfare state to support. You try living in the US without health insurance, and have a medical problem, and watch how you get treated! It's swings and roundabouts - the cost of fuel is only a single measure of quality of life. A much fairer comparison would be with countries in Western Europe, such as France and Germany.

It's all relative, fuel prices have gone up in US too, so obviously they are going to be hurting (from their perspective). The US population are much more pro-active, and lobbying is part of the political culture.

Don't have to sit and take it - what are YOU doing to CHANGE the situation?

There is always the alternative of Venezuela, they have the cheapest petrol in the world (as do most nations that don't need to import oil for car usage) , just 0.7pence per litre @Jan 2008.

Exactly. The people who go to work in this country do so so that those who don't want to work don't have to and get everything for free - from dole to health care.

And what do you suggest I do about it? Launch my own 1-man political protest? The only things one can do about it is to do exactly what the government want - either do nothing in which case you're still paying lots in petrol, or downsizing which helps their green strategy.

You refer to "free riders". However, there are many GENUINE people in this country who benefit from the welfare state. Just look at social services, mental health units and all the ancillary facilities that are available to those in need. What happens if you have a disabled child and you just can't care for the child 24 hours a day? The welfare state will step in and help out.

Yes, why not launch a 1 man political protest? Protests have to start somewhere. Why not write a letter to your MP? Why not get everyone you know to write a letter to your MP? There are many ways of airing your voice, be it via conventional channels or starting a riot.

An apathetic population will continue to be taken advantage of by any government, both here and abroad.

Protests have changed things in the past, and it starts from the ground up. I'm sure if the fuel price continues to rise, there may be more protests by hauliers and/or private motorists. If you don't feel like starting your own, I'm sure you can tag on to another group's protest.

The point I'm making is whinging will get us nowhere as a nation if we TRULY want change here. We are going to require action, and that has to start at the grassroots level, in the community.

Hear hear - well said that man.

With regard to writing to your MP, I do. Regularly. And I always get a reply - even if it's not what I want to hear, he's made the effort to read it and respond and if enough people do it on a specific issue, the message 'we want change on this matter' starts to get home. Depending what it is, he'll write onwards to the cabinet minister responsible, and get an answer from him/her and pass it on to me.

[Parthiban]

I didn't mean this is turn into a political discussion but I realise that that's one of the main causes of the fuel prices. However, I do think that whatever we do, the only real change we can make is to finally get rid of this Labour government - without that this country will not improve. The best thing everyone can DO is to make sure they get everyone they know to vote in the election and to vote Conservative!

While I agree with the welfare state, the degree to which it runs in this country is totally ridiculous - there is no way the sort of money we plough into it can work with the workforce we have, the way it is at the moment can only result in the destruction of the country and that is actually what is happening at the moment.

Whether it is repairable we'll have to wait and see but as far as I'm concerned if Labour make it back in next election, that will be the end and I'll be looking to get out of here the first chance I get........

[TigerFish]

the way it is at the moment can only result in the destruction of the country and that is actually what is happening at the moment.

Lets bring things down to earth a bit chaps and chappesses. Talk about over dramatising. Try living in Iraq, Zimbabwe, Afghanistan, blah, blah. Then talk about how sh*t a country can be. I hate the price of petrol too, and I cover around 800 miles a week in my GS so spend a lot on petrol, but there are actually worse places to be in this world than good ole Blighty.

[Wallace]

It has something to do with "futures markets", where people guess the price of a barrel for delivery in a months time. Unfortunately this seems to be that the futures markets are now dictating what it will cost. Someone (apart from the chancellor) is making a lot of money at out expense.

[Parthiban]

Lets bring things down to earth a bit chaps and chappesses. Talk about over dramatising. Try living in Iraq, Zimbabwe, Afghanistan, blah, blah. Then talk about how sh*t a country can be. I hate the price of petrol too, and I cover around 800 miles a week in my GS so spend a lot on petrol, but there are actually worse places to be in this world than good ole Blighty.

That is a fair point mate, but what I meant was in reference to the civilised developed world...............and I wasn't just talking about fuel prices, it's just the current state of everything that's a mess ;)

It has something to do with "futures markets", where people guess the price of a barrel for delivery in a months time. Unfortunately this seems to be that the futures markets are now dictating what it will cost. Someone (apart from the chancellor) is making a lot of money at out expense.

Ok, this is the sort of thing I was actually trying to get at with the start of this thread, but even though the oil price is shooting up, why is it doing the same at the pumps? Surely the station buys in a load at a certain price, and then the price should really only go up again when they buy in their next batch and it costs them more............at the moment it seems to be going up at almost 1p per day

[maneesh]

Why does the petrol price change at the pump

Who is oil speculator Michael Masters?

Despite surplus of oil, prices are still rising

Oh, it took just 2 minutes on google news to find these articles..

[maneesh]

the way it is at the moment can only result in the destruction of the country and that is actually what is happening at the moment.

Lets bring things down to earth a bit chaps and chappesses. Talk about over dramatising. Try living in Iraq, Zimbabwe, Afghanistan, blah, blah. Then talk about how sh*t a country can be. I hate the price of petrol too, and I cover around 800 miles a week in my GS so spend a lot on petrol, but there are actually worse places to be in this world than good ole Blighty.

Yup. The grass ALWAYS looks greener on the other side. This country survived World War II, it can survive this Labour government.

[Parthiban]

Thanks for those links but that wasn't exactly the info I was after..........just to clear things up and head back to where I started, this wasn't a dig at the UK or anything, it's only because it went that way that I added my 2ps worth. Having said that, I wasn't being over dramatic, that is the state of affairs in this country, I'm not saying it's dead but without a change of government we're certainly heading that way. Yes we CAN survive this labour government, but for that to happen, the first thing required is to GET RID of them!

Anyway, back on track, the question I was asking was whether there was anyone who worked in the industry or on the markets who could provide a real life insight, quite generic explanations off the web was not what I was looking for...........