OxBowBusiness

Petrol Prices II

As I was driving past a petrol station yesterday I made a mental note that they were advertising unleaded petrol at 90.9 pence per litre. A lot more than the 84.9 pence per litre I found on Saturday night. So I did a bit of digging.

I found www.whatprice.co.uk/car/petrol-prices.html and they said that BP unleaded petrol is 95 pence per litre at their Milton Heights petrol station. Then it said it was 95 pence per litre at BP stations at Frilford, Hartwell Abingdon ... and Shell unleaded is 95 pence ... So, I discounted that as being unreliable.

A bit more research revealed a very useful article from The Scotsman newspaper: Petrol prices fall to lowest level in over a year. This article explains the relationship between the price of crude oil and the price of petrol at the pump: leads and lags, for economists.

From www.petrolprices.com, we see that on Sunday unleaded petrol in the UK cost:

Unleaded average of 87.4p, a minimum of 83.9p and a maximum of 100.0p

In my own post code area, according to petrolprices.com, the equivalent figures are:

Unleaded average of 87.9p, a minimum of 84.9p and a maximum of 92.9p

I then enetered a post code for a place where I used to live (the North East of England), just to see whether petrolprices.com is showing different prices elswhere, unlike www.whatprice.co.uk:

Unleaded average of 86.9p, a minimum of 84.9p and a maximum of 89.9p

The petrolprices.com web site claims:

* The only site to cover all UK petrol stations
* Over 8,000 daily updates

What are you opinions and conclusions so far?

Do you know how the price of a litre of petrol is set? According to petrolprices.com, it is as follows:

"Fuel is taxed twice: firstly by fuel duty and then by VAT. Fuel duty is a fixed amount (47.1p per litre for unleaded and diesel) and VAT is a percentage (17.5%)."

Is that a good thing? Well, what do you make of this, also from petrolprices.com? Data applies only to the UK, please note.

"In the 2004–05 fiscal year, fuel duty alone generated approximately £23.5 billion and this does not include the VAT raised on the fuel sold. In the 2005-06 fiscal year only £21 billion will be spent by government on transport as a whole. So, fuel taxation not only pays for the upkeep of our roads but it also helps to pay for the other things that government spends our money on."

There is another easy to read article in The Scotsman, Slowing demand pushes oil below $60 that discusses the recent falls in the price of crude oil. Did you know that it has fallen to around $60 per barrel now? A $19 per barrel fall since mid July.

Assuming that this link will stay valid, why not go to this Advanced Financial Network web page to see how the crude oil price is now back to the level it held in January of this year?

An excellent topic in supply and demand, markets, commodities, commodity v retail prices, cartels, leads and lags and a whole lot more.


Duncan Williamson

posted by Duncan Williamson @ 6:05 AM