it actually does work the other way thats why the oil price went briefly negative last year, the tankers and storage were all full of oil , the traders that had forward bought the oil had to pay someone to take the oil off them because they could not take physical delivery of it.Extra profits for those who own the oil stock on the ships bought at a lower price and now to be sold at a higher price to the motorist.
I don't remember it ever works the other way round
Too many people jump on this "prices rise immediately" bandwagon without checking any facts whatsoever.Funny how the slightest hiccup in the supply chain causes prices at the pump to rise immediately.
The crude stuck in the Canal will not be refined for weeks yet and the raw crude that is being pumped out and sold for the higher price won't reach the forecourts for months
Extra profits for those who own the oil stock on the ships bought at a lower price and now to be sold at a higher price to the motorist.
I don't remember it ever works the other way round - when the raw price drops, we have to wait for the existing stocks to be used up before the price drops at the pump
Very good post @peemac and thanks for taking the time.Too many people jump on this "prices rise immediately" bandwagon without checking any facts whatsoever.
I used to assist with pumps.ie and this subject came up. So a chart was made with oil prices (after exchange rate) and fuel prices and the pattern was steady for the 2+ year period that the figures were compiled. That was both increases and decreases and it worked out as 14-17 days.Very good post @peemac and thanks for taking the time.
Notwithstanding all the facts and figures, over 40 years of buying fuel at pumps has me totally convinced that "prices rise immediately" is not too far wide of the truth.
Imagine, for a second, we wake up to headlines such as:-
OPEC to cut output by 60%,
Godzilla destroys over 60% of world's oil refineries,
Due to shortage crude oil rockets to $250 a barrel,
Absolutely guarantee within a week (probably less) the pump prices would increase even though they would still be working with held stock.
Reverse the headlines and see how long it would take for the prices to drop.
As I said the above is just based on my own long-term observations and may well be incorrect, but some how, I don't feel it is.
I used to assist with pumps.ie and this subject came up.
I never met the guy that ran it. I think he just git too busy with other things. Advertising income for the site was miniscule.Whatever happened to pumps.ie?
I’d used IrishFuelPrices.com for a long time but was an instant convert to pumps.ie when I discovered it.
It was invaluable.
Probably not as important these days will travel restrictions and #StayAtHome, but it would still be handy to have.
Would genuinely like to know what happened.
Indeed it does and this is a particular 'bug bear' of mine.Currency changes make a difference too. In February the dollar was over 1.22. its now 1.19. That's 3% on the refined price.
The Consumer Association just like the media don't bother to check facts or do any actual working out of how its done. (I've shown how easy it is to work out the price) However the CCPC did a very comprehensive study a few years ago and found that prices rose and fell within the same timeframes, but because it did not correlate with what the media wanted, it got very little coverage. Bad news sells news, Good news doesn't.Indeed it does and this is a particular 'bug bear' of mine.
Last May2020 the Euro was as low as $1.09 and recovered to $1.20 in Sept2020, a reduction of nearly 10% (9.2% to be exact) on the refined price.
I don't remember any retail group saying we have reduced our prices because of currency fluctuation but they are very quick to defend their price increase using same.
Anyway I'm not alone in 'thinking' retailers tend to be somewhat slower in decreasing as opposed to increasing prices :-
see a few post above for how the fuel price is made up.The fuel retailers didn’t pass on the proportioned saving in full that they were making on the wholesale price for the last year.
And now they’re increasing the retail price based upon demand.
I know about low margins in fuel prices ordinarily. My point is that margin was increased exponentially during the lockdownssee a few post above for how the fuel price is made up.
Put it this way - I'm in retail. The absolute last type of business I would look at is fuel retail as the margins are miniscule. The shops is where the money is and if the fuel price is not competitive, you won't get people into your shop for that very very profitable cup of coffee.
BTW, the UK is currently £1.28 (€1.49) for petrol and £1.31 (€1.53) for diesel.
Here's the NCA (Now CCPC) report from 2008