diesel outpricing petrol..why?

goz83

Is it just me or does anyone else agree that the price of Diesel exceeding the price of petrol is daylight robbery? I was under the impression that diesel is cheaper to refine yet more and ore frequently is is matching and even exceeding the price of petrol. Any insight?

jhegarty

Good question :

http://www.rte.ie/news/2008/0516/economy.html

rameire

http://www.petrolprices.com/why-diesel-costs-more-than-petrol.html

Part of the problem is that diesel isn’t actually as cheap to produce as some people think, at least not the modern “clean” variant anyway. Although diesel requires less crude oil per litre than petrol does to produce, newly established standards for lower sulphur diesel require a more complex refining process.

the above is a uk site so some details are different to in ireland, but you get the gist

Guy:Incognito

50 threads about diesel prices....why?

rameire

Stekelly wrote: »

50 threads about diesel prices....why?

because a lot of people care about it because it affect's a lot of people

Bluetonic

rameire wrote: »

because a lot of people care about it because it affect's a lot of people

Does a lot of people caring about it somehow invalid the previous threads where it's all been covered to death? Does it stop them using the search facility?

eirmail

There is high demand worldwide at the moment for diesel as diesel is used to generate electricity and petrol isn't. Diesel is often used to generate electricity when other plants aren't working such as hydroelectricity or gas. The earthquake in china has taken out some of their other capacity and they have resorted to using diesel to generate electricity.

rameire

Bluetonic wrote: »

Does a lot of people caring about it somehow invalid the previous threads where it's all been covered to death? Does it stop them using the search facility?

no,

Kess73

spotted two service stations selling it for over €1.40 per litre in Limerick today.

mcaul

USA Price for petrol / diesel

Petrol - average $3.80 per US Gallon + sales tax (3.6litres). About 80c / litre incl sales tax
Diesel - Average $4.50 per US gallon + sales tax. About 95c / litre incl tax.

The higher diesel price is a worldwide probelm and irish fuel stations cannot do anything about it.

Saw price going up to 1.37 in galway early yesterday evening and within an hour or so all stations as far as Athlone were at 1.37. Even Tesco are at 1.31 today

Still 1.28 in Athy

rameire

mcaul wrote: »

Still 1.28 in Athy

Good ole King Oil

Voipjunkie

eirmail wrote: »

There is high demand worldwide at the moment for diesel as diesel is used to generate electricity and petrol isn't. Diesel is often used to generate electricity when other plants aren't working such as hydroelectricity or gas. The earthquake in china has taken out some of their other capacity and they have resorted to using diesel to generate electricity.

What nonsense the earthquake only happened this week the Diesel at the pumps now would have been bought months ago the whole fuel price rise is a scam from the money markets 15 years ago they did something similar to currencies and the ordinary joe soap had to pay with 16% interest rates till the governments gave in and devalued and let them make a killing now it is oil

There is no shortage of oil yet the price keeps going higher and higher its not like we are vying with the chinese for the last couple of barrells we get all we want and so do the Chinese the price is being pushed up by the money markets so people like Soros can make a few billion in speculation

Danno

BioDeisel is 119c in Portlaoise.

mcaul

Voipjunkie wrote: »

the Diesel at the pumps now would have been bought months ago the whole fuel price rise is a scam

Retailers of all commodity goods are priced according to the replacement cost. The retailers purchase off the oil companies who charge the prevailing cost on the world market.

Retailers purchase on a weekly basis - comodity traders purchase in advance and sell on to make profits.

Similarly when world prices come down - which they will - then retail prices will come down in tandem as the replacement cost of the product is lower.

as for it being similar to the currency speculation, this is correct and similar to the internet bubble of the late 90's. Traders gamble on whatever is in vogue and we pay for it.

eirmail

Voipjunkie wrote: »

What nonsense the earthquake only happened this week the Diesel at the pumps now would have been bought months ago the whole fuel price rise is a scam from the money markets 15 years ago they did something similar to currencies and the ordinary joe soap had to pay with 16% interest rates till the governments gave in and devalued and let them make a killing now it is oil

There is no shortage of oil yet the price keeps going higher and higher its not like we are vying with the chinese for the last couple of barrells we get all we want and so do the Chinese the price is being pushed up by the money markets so people like Soros can make a few billion in speculation

i am in spain now and diesel is dearer than petrol here as well, I dibn´t say the earthquake was fully to blame for this but a high demand for electricity generated worlwide from diesel is behind this.

Danno

Danno wrote: »

BioDeisel is 119c in Portlaoise.

where in portlaoise?

Colonel Sanders

I paid 125.9c in tesco in wexford town yesterday, thats the cheapest i saw on the drive back to dublin by a long, long way. Saw 2 garages cahrging 139.9 :eek:

dahamsta

If Tesco can keep the prices the same, everyone else can. I just wish they had a station in Cork.

Word going round that diesel is to go up + 0.04c today/morning :mad:

mcaul

dahamsta wrote: »

If Tesco can keep the prices the same, everyone else can. I just wish they had a station in Cork.

tesco seem to be 1.32 in most of their stations

Colonel Sanders

mcaul wrote: »

tesco seem to be 1.32 in most of their stations

the guy who sits beside me in work says he paid 131.9 in tesco yesterday (altho not sure which store, he lives in maynooth)

Colonel Sanders

btw any chance of a fuel price sticky?

www.pumps.ie is a good idea but its not updated very often

treefour

I think people are being incredibly naïve about a lot of this and are willing to believe everything the market tells them regarding the hike in prices. I personally think it is good old gouging of the customer. I think, with more and more people worldwide switching to diesel, which was a cheaper product than the petrol they were buying, someone saw an opportunity to raise diesel. I fully accept that this is not to blame for all of the increase but I’d bet it had a lot to do with it. Other reasons may include the Bio fuel aspects of diesel proving that it rather than petrol is the immediate future. It’s not totally implausible that this happened, petrol is becoming an even dirtier word and profit margins must be maintained. Better MPG means less fuel, and some people will be having none of that.

In the last few days I heard (Radio 1 – George Lee) that one of the Middle East oil producers (Think it was Saudi Arabia) had stated they were upping output but the market had decided to ignore it citing other reasons such as the earthquake, this helped to keep prices rising. I also heard a few weeks back that that had not produced enough diesel! I can’t believe that the people responsible for supply are so poor at their job. They seem to be having it everyway. It is starting to look like the energy crisis in California a few years ago. The guys buying and selling electricity exploited the situation by using tactics such as curbing supply during high demand periods. They took what was no doubt a problem but turned it into a catastrophe for higher profits. One of the first excuses was demand for heating fuel but as soon as spring arrived there was another excuse waiting to be trotted out. I think a lot of the demand is being exaggerated.

With falling currencies and bigger profits for the companies involved the excuses are not making sense to me! I think Peak Oil and the Environment Changing Policies are going to end in a mess with me and you left to carry the empty can. I think events such as this show that we are well on our way.

craichoe

treefour wrote: »

I think people are being incredibly naïve about a lot of this and are willing to believe everything the market tells them regarding the hike in prices. I personally think it is good old gouging of the customer. I think, with more and more people worldwide switching to diesel, which was a cheaper product than the petrol they were buying, someone saw an opportunity to raise diesel. I fully accept that this is not to blame for all of the increase but I’d bet it had a lot to do with it. Other reasons may include the Bio fuel aspects of diesel proving that it rather than petrol is the immediate future. It’s not totally implausible that this happened, petrol is becoming an even dirtier word and profit margins must be maintained. Better MPG means less fuel, and some people will be having none of that.

In the last few days I heard (Radio 1 – George Lee) that one of the Middle East oil producers (Think it was Saudi Arabia) had stated they were upping output but the market had decided to ignore it citing other reasons such as the earthquake, this helped to keep prices rising. I also heard a few weeks back that that had not produced enough diesel! I can’t believe that the people responsible for supply are so poor at their job. They seem to be having it everyway. It is starting to look like the energy crisis in California a few years ago. The guys buying and selling electricity exploited the situation by using tactics such as curbing supply during high demand periods. They took what was no doubt a problem but turned it into a catastrophe for higher profits. One of the first excuses was demand for heating fuel but as soon as spring arrived there was another excuse waiting to be trotted out. I think a lot of the demand is being exaggerated.

With falling currencies and bigger profits for the companies involved the excuses are not making sense to me! I think Peak Oil and the Environment Changing Policies are going to end in a mess with me and you left to carry the empty can. I think events such as this show that we are well on our way.

Hmm .. a bit of a conspiracy thoery there, well .. i can tell you thats not the case and its not as simple as that. But the cost of fuel will go up and up, the only way governments offset it at the moment (such as france) is add a percentage of biofuel to normal diesel to equalise against the rising prices.

treefour

Hmm .. a bit of a conspiracy thoery there, well ..

Just like in California?! TBH I don’t think it is a conspiracy but just someone seeing an opportunity and a need for the price to increase not inline with the fundamentals. And its not like this has never happened before.

i can tell you that’s not the case and its not as simple as that.

I find it amazing that the simple principle of “supply and demand” changes in this situation.

But the cost of fuel will go up and up, the only way governments offset it at the moment (such as france) is add a percentage of bio fuel to normal diesel to equalise against the rising prices.

I agree it will only go up but I question the real motivation behind it. The cost of Bio fuel has also increased here. With all the framers growing bio fuels the cost of bread etc has also risen. The cost of products from both crops are rising and I understand that if fuel is high the cost of delivery goes up too but if there is an increase in bio fuel maybe it would help offset the price.

I agree the government should do something here as well, maybe get a handle on this and get the f%^£&^s in.

craichoe

treefour wrote: »

Just like in California?! TBH I don’t think it is a conspiracy but just someone seeing an opportunity and a need for the price to increase not inline with the fundamentals. And its not like this has never happened before.


I find it amazing that the simple principle of “supply and demand” changes in this situation.



I agree it will only go up but I question the real motivation behind it. The cost of Bio fuel has also increased here. With all the framers growing bio fuels the cost of bread etc has also risen. The cost of products from both crops are rising and I understand that if fuel is high the cost of delivery goes up too but if there is an increase in bio fuel maybe it would help offset the price.

I agree the government should do something here as well, maybe get a handle on this and get the f%^£&^s in.

Yes it is indeed.. Energy traders hedge their trades with Oil, Gas, Currencies etc, even which government is coming into power can affect the oil price. So its not as simple as supply and demand.

treefour

Energy traders hedge their trades with Oil, Gas, Currencies etc, even which government is coming into power can affect the oil price. So its not as simple as supply and demand.

Your starting to sound like Fox News when they said that Clinton/Obama (c)would cause oil to soar and McCain wouldnt! I dont disagree with you but this is not what I am seeing happening. Of course geopolitical events impact on the price but in this current climate I think these excuses are being abused and the waters muddied. I think the companies are exploiting Peak Oil. Its happening at or close to the well and governments are pretty much powerless plus in some areas their friends are the government.

From Wikipedia Oil Crisis (Not the best source I know)

The same time, OPEC members agreed to use their leverage over the world price-setting mechanism for oil in order to raise world oil prices, after the failure of negotiations with the "Seven Sisters" earlier in the month. Because of the dependence of the industrialized world on crude oil and the predominant role of OPEC as a global supplier, these price increases were dramatically inflationary to the economies of the targeted countries

Anyways, thats my 2 cents which I really should be using to pay my oil bill.

eirmail

Voipjunkie wrote: »

What nonsense the earthquake only happened this week the Diesel at the pumps now would have been bought months ago the whole fuel price rise is a scam from the money markets 15 years ago they did something similar to currencies and the ordinary joe soap had to pay with 16% interest rates till the governments gave in and devalued and let them make a killing now it is oil

There is no shortage of oil yet the price keeps going higher and higher its not like we are vying with the chinese for the last couple of barrells we get all we want and so do the Chinese the price is being pushed up by the money markets so people like Soros can make a few billion in speculation

this backs up my point

http://timesofindia.indiatimes.com/Business/Intl_Business/Oil_near_125_on_heating_oil_supply_strain/rssarticleshow/3045119.cms


"But surging demand from developing countries, such as China, helped bolster heating oil prices. PetroChina is seen buying a third more diesel at 400,000 tonnes for June versus May's levels, following a deadly earthquake"

So Chinese demand for Diesel is up a third but it doesn't mention a corresponding increase for petrol

Mollywolly

I've seen diesel at 142.9 per litre in Limerick yesterday. How high can it go? I need to order kerosene for the heating but I'm scard I'll need another mortage to pay for it!

Colonel Sanders

price of oil has retreated slightly from its high of 135$ ish. Think its about 130$ now.

I notice that garages are far quicker to increase prices than lower them.....

mcaul

Colonel Sanders wrote: »

price of oil has retreated slightly from its high of 135$ ish. Think its about 130$ now.

I notice that garages are far quicker to increase prices than lower them.....

The oil companies have a set way of establishing retail prices and this is revised every week on a Tuesday. When the markets are particularly volatile the prices are revised Tuesdays & Fridays. So normally you see prices change in most garages on Tuesdays, sometimes Wednesdays and next Tuesday should see a drop of 3c in Petrol & possily 4c on Diesel.

Oil is currently at $126 and it is just possible that the bubble has finally burst and we will see a continuous down trend in oil price to below the $100 mark & petrol & diesel prices back to the €1.10 - €1.15 level fairly quickly. - though at the same time, the US Dollar may strengthen so a 25% drop in oil prices may in reality be ony 20% at world level and translate to about 10% - 15% drop at retail level (duty levels, refining costs etc don't change)

Colonel Sanders

mcaul wrote: »

The oil companies have a set way of establishing retail prices and this is revised every week on a Tuesday. When the markets are particularly volatile the prices are revised Tuesdays & Fridays. So normally you see prices change in most garages on Tuesdays, sometimes Wednesdays and next Tuesday should see a drop of 3c in Petrol & possily 4c on Diesel.

I have seen certain garages (in fairness not all) change the prices on an almost daily basis when prices were increasing.

NinjaTruncs

mcaul wrote: »

though at the same time, the US Dollar may strengthen so a 25% drop in oil prices may in reality be ony 20% at world level and translate to about 10% - 15% drop at retail level (duty levels, refining costs etc don't change)

Are you saying that if the Dollar gets stronger Oil prices will go up? I believe it to the the oother way. One reason why oil prices have gone up is becasue the Dollar has gotten so weak. so if the dollar strenghtens the price of oil should go down.

Padraig Mor

mcaul wrote: »

The oil companies have a set way of establishing retail prices and this is revised every week on a Tuesday. When the markets are particularly volatile the prices are revised Tuesdays & Fridays. So normally you see prices change in most garages on Tuesdays, sometimes Wednesdays and next Tuesday should see a drop of 3c in Petrol & possily 4c on Diesel.)

Now call me cynical but why should the price at garages go up just because the wholesale price has raised? Surely the garages only pay the increased price for fuel when they actually receive their next delivery after the increase? And if they raise before then they're only skimming off extra profit? Like shops who raise fags etc the day after a budget increase, even though they don't pay the higher price for some time. Or do I have it wrong?

Colonel Sanders

Padraig Mor wrote: »

Now call me cynical but why should the price at garages go up just because the wholesale price has raised? Surely the garages only pay the increased price for fuel when they actually receive their next delivery after the increase? And if they raise before then they're only skimming off extra profit? Like shops who raise fags etc the day after a budget increase, even though they don't pay the higher price for some time. Or do I have it wrong?

I think someone said earlier in the thread that its priced at replacement value. Hence the price should come down at the pumps seeing as the price of a barrel of oil has fallen to about the 125$ mark. Not holding my breath that they'll lower it as quickly as they increased it over the last few months

Mollywolly

Padraig Mor wrote: »

Now call me cynical but why should the price at garages go up just because the wholesale price has raised? Surely the garages only pay the increased price for fuel when they actually receive their next delivery after the increase? And if they raise before then they're only skimming off extra profit? Like shops who raise fags etc the day after a budget increase, even though they don't pay the higher price for some time. Or do I have it wrong?

I don't think you're cynical, because if you are, then the whole lot of us unlucky punters are in the same boat! I'm fortunate that our local garage seems to hold on for as long as possible before they put up the price -if only everyone was like that

Del2005

NinjaTruncs wrote: »

Are you saying that if the Dollar gets stronger Oil prices will go up? I believe it to the the oother way. One reason why oil prices have gone up is becasue the Dollar has gotten so weak. so if the dollar strenghtens the price of oil should go down.

What they are saying is that the Euro has been worth ~$1.55 for the last while.

If the Dollar gains on the Euro then you get less $s for you're €, so when you buy something in $s you have to give more €s.

parsi

Padraig Mor wrote: »

Like shops who raise fags etc the day after a budget increase, even though they don't pay the higher price for some time. Or do I have it wrong?

You do for the shops. When Excise Duty goes up it's operative on all sales from the time it's raised so a pack of fags is chargeable at the old rate at 23:59 but come midnight the new rates applies and is immediately chargeable.

Now the increase in petrol prices due to increased cost to the retailer is anotehr kettle of fish..

the_syco

I'll stick by my theory of: Saudi's get less money, they reduce the amount of output to raise the price, so that they'd get their money.

=-=

Question: what percentage does Russia have NOW? Not 2 years ago, as Russia has been, erm, "aquiring" oil companies, and jailing their owners, so would love to know mow much they bring to the stage.

Also, are they members of OPEC?

mcaul

Not sure if this will cgeer you up, but throughout the north, petrol was on average £1.25 sterling and diesel £1.36 sterling.

What was even worse was the UK budget in April increased the duty on all spirits, so even a bottle of brandy to soothe the effects of price rises had virtually no saving £23.99 for std Martell in sainsburys against €31.99 here.

r3nu4l

Are Tesco still cheaper than everywhere else in Ireland? Over where I live they are either the same price or 1p per litre DEARER than all the other garages!!

Of course, if you spend >£50 in the shop, you get 5p off every litre of fuel you buy...

NinjaTruncs

parsi wrote: »

You do for the shops. When Excise Duty goes up it's operative on all sales from the time it's raised so a pack of fags is chargeable at the old rate at 23:59 but come midnight the new rates applies and is immediately chargeable.

that's not true about the duty on smokes. A shop is charged the duty on them when they're bought from the supplier, so when the go up in the budget and a shop puts them up the next day it's pure profit for the shop.

Padraig Mor

parsi wrote: »

You do for the shops. When Excise Duty goes up it's operative on all sales from the time it's raised so a pack of fags is chargeable at the old rate at 23:59 but come midnight the new rates applies and is immediately chargeable.

Now the increase in petrol prices due to increased cost to the retailer is anotehr kettle of fish..

You sure about that? You may be thinking of VAT. It's *excise* duty, which I would imagine is applied when the goods enter the country, i.e. at a bonded warehouse even before they go to the supplier's depot. "Enterprising" retailers could even order massive amounts before an expected budget excise increase and cream off the extra 50 cent per pack (or whatever) for months. I'm sure that wouldn't happen in Ireland though...

Colonel Sanders

r3nu4l wrote: »

Are Tesco still cheaper than everywhere else in Ireland? Over where I live they are either the same price or 1p per litre DEARER than all the other garages!!

Of course, if you spend >£50 in the shop, you get 5p off every litre of fuel you buy...

diesel was 134.9c in tesco wexford yesterday, I saw it for the same price in 2 places and for 2c in the maxol across the bridge.

On the way to work today i didn't see any garages had reduced the price of diesel despite the price of a barrle of oil falling in the last week......

highlydebased

It has little to do with the price of oil.

With the new VRT rules coming into affect very shortly, it will be much cheaper for people to buy diesel motors with larger engines. In fact it would be cheaper to tax a 3.0 litre diesel than a 1.6 petrol in some instances. the government are going to loose out on revenue here, as most people will see the opportunity and purchase diesel, so to make up the loss, the government have decided to increase the tax on Diesel.

Colonel Sanders

Neon-Circles wrote: »

as most people will see the opportunity and purchase diesel, so to make up the loss, the government have decided to increase the tax on Diesel.

HAVE YOU A SOURCE FOR THIS, WAS IT NOT THE CASE THAT THE DUTY ON DIESEL USED TO BE LESS THAN THE DUTY ON PETROL?

EDIT: just noticed I'd caps lock on when writing that!!!!

mcaul

Neon-Circles wrote: »

It has little to do with the price of oil.

With the new VRT rules coming into affect very shortly, it will be much cheaper for people to buy diesel motors with larger engines. In fact it would be cheaper to tax a 3.0 litre diesel than a 1.6 petrol in some instances. the government are going to loose out on revenue here, as most people will see the opportunity and purchase diesel, so to make up the loss, the government have decided to increase the tax on Diesel.

There's not a chance in hell of the government increasing tax on diesel - all truckers, fishermen, independent bus drivers would protest on the spot and bring the country to its knees!


Here's the US delivered to port prices from the refineries for diesel since April. Prices are per US Gallon (3.6 litres). Prices changes take approx 10 - 14 days to hit the pumps. Todays price is $3.84

2008 Apr- 7 to Apr-11 329.50 336.00 349.45 338.86 333.65
2008 Apr-14 to Apr-18 333.49 342.00 343.10 341.93 345.15
2008 Apr-21 to Apr-25 347.69 348.33 349.21 343.60 350.70
2008 Apr-28 to May- 2 346.50 341.74 338.67 330.34 339.73
2008 May- 5 to May- 9 350.50 353.77 364.10 371.08 383.52

2008 May-12 to May-16 371.50 386.19 378.35 381.46 389.40
2008 May-19 to May-23 386.77 395.50 411.90 412.33 405.20
2008 May-26 to May-30 closed 396.86 395.85


Here's a breakdown of the 1.44 / litre diesel price

Price to port $3.95 per 3.6 litres = 73.2c (euro)
Irish Duty = 36.8c
VAT on 1.44 = 24c

Balance = 10c for local distributor + garage.

for every 10c increase / decrease in the NYMEX price per gallon, a increase / decrease of 2.5c per litre is fed into retail prices assuming the US dollar stays static.

Here's the US port price from 1986 for diesel - in 1986 it fell as low as 25c per gallon!!!
http://tonto.eia.doe.gov/dnav/pet/hist/rdllad.htm

mcaul

I really must get busy on my real job!!!:D

The good news is diesel delivered to port has dropped almost 10% from highs and prices should see decline to about 1.33 in the next 2 weeks and further if the current downtrend continues as most analysts expect.
High was $4.12, yesterday's close was $3.73 per US Gallon (3.6 litres)

Here's a graph showing how diesel suddenly went ahead of regular gasoline on the world market at the end of Feb
http://www.profitquotes.com/cgi/?a=chart&ticker=%2FLU_C%2C%2FLR_C&title=1+Year+Growth+Comparison&period=1yp

Danno

So there is VAT on duty - is that not an illegal taxation? How can you tax a tax?

Del2005

Danno wrote: »

So there is VAT on duty - is that not an illegal taxation? How can you tax a tax?

Cause they can. Same with VRT, you get charged VAT on the OMSP plus VRT(or the other way round).

ircoha

Danno wrote: »

So there is VAT on duty - is that not an illegal taxation? How can you tax a tax?

same on stuff imported from states
eg on clothes duty is 12 % which is added to the price and then 21% on the lot