Current cost of fuel.

Where Shiney?
Filled up Friday at Asda which is now 8p cheaper than the BP and Shell garages at 173.9p per liter. When we go up to our caravan in the Morecambe bay area it is always about 5p cheaper.
Why is this ? South Lancs / Grtr Manchester is only 20 miles from the major refineries at Runcorn.
What determines the area cost per litre of petrol/diesel?

 

Contracts.

A distributor will enter into a contract to by X quantity of fuel, delivered in chunks 'call offs' over a period of N months. The price is agreed at the time the contract is committed.

So if you're a distributor, and you've negotiated a price for X quantity of fuel over N months, you'll have negotiated the price based on expected price over time, expected demand etc. So let's say there are two distributors 50 miles apart. One entered into a 6 month contract two weeks ago. The price may have been forecast to keep rising so they'll pay a higher price. The other only signed up today, and prices are stabilising or going down (I don't watch oil price so this is hypothetical to explain the mechanics of it all), they'll get a cheaper price for their six month contract. There's nothing the first one can do about it because they've entered into a contract.

All sounds fair so far. But here's where we as consumers get ripped off. So in our little example, the second distributor got a better deal, but suddenly oil prices shoot up. The second distributor still pays the cheaper price because they have a contract at that price, but it won't stop the retailers putting the price up because thats the way the market is heading.

So that covers contracts, which is the bulk portion. But demand may rise and fall outside of forecast. That might mean that retailers have to buy additional tanker loads outside of their contracts, so they'll make 'spot' sales. Ie one off purchases at current market rates, which may push the price to consumer one way or the other.

 

Fuel prices are still dropping. Our local garage is down to £1.59.9 unleaded and £1.77.9 diesel.

There has been a distinctive lack of motorhomes and towed caravans here this summer, probably down to the cost of fuel.

 

Petrol is still £1.79 per litre here. Seems almost a bargain price! But before all the supply problems started it was around £1.38. So we are paying an extra £1.84 per gallon over late 2021 prices

 

Diesel is £1.87p petol £1.68p

 

In town, at Tesco's and Morrison's they're charging 179 at the moment. But here's a twist, it's 169 at the service station on the A19. Major route service stations usually charge a premium on the basis that they know if you can't wait til you get to town, you must be desperate. It's madness that they're currently cheaper than the town based petrol stations.

In other fuel related news, I get investment notifications, and one came through today saying crude oil is down 5% on the back of fears of recession in China. Two things popped into my mind. 1. The price has dropped based on fears of something that MIGHT happen, so it's not based on current demand, and 2, I bet it's a while before we see a corresponding 5% drop in retail fuel prices.

 

I've been noticing that the supermarkets are changing more for fuel than the independents for some reason.
It all points to money grabbing in certain areas, and there is so much money to be made out of a crisis I tend to think we will be in a perpetual crisis, of some kind, for many years to come now.

 

I don't know what's happened to us Brits. About 20 years ago fuel prices went through the roof and I seem to recall mass protests, with refineries being blockaded and rolling road blocks on the motorways. I remember there being bread shortages due to the knock on effects.

Some years before that, a bit before my time, I seem to remember reading about a similar situation which led to the success of the Mini, hailed as a solution to rising fuel costs.

What is the 2022 national response? We grumble a bit. That seems to be about it.

 

And did any of that action achieve anything other than making life even more difficult.

 

Well, prices dropped back down and it gave people something new to talk about. And the original Mini was quite a cool car, as long as safety wasn't high on the owners list of priorities.

 

So nought to sixty came down from one week to some time next month.

 

You are joking but I had a book of Autocar road tests of 50's saloons and in it was the Mk 1 Ford Consul. We had one, and after the Vauxhall Wyvern in which I passed my test, it felt pretty nippy.
0 - 50 mph (not 60 or 62 back then) was 29 point something seconds!