Fuel Prices hike

juuge

I've noticed in the last ten days or so that the price of both petrol and diesel has been steadily increasing at the pumps. In north leinster every petrol retailer I've passed has increased their prices practically every couple of days. At the beginning of January 2009 the average price for petrol was 89-91c now it's 95-99c. What's going on? International oil prices have not risen and as we were told by the AA it takes three weeks for the retail price to be affected by price rises on the wholesale market and in the middle of December 2008 the price of a barrel of oil was at an historic low.. There are five petrol retailers in or around the Blessington area of Co Wicklow and each one is charging exactly the same price for both petrol and diesel 97.9c. This has to be at the least 'profiteering' ,and certainly it's 'price fixing'. Don't these guys know that we are in a recession ?

ejmaztec

juuge wrote: »

I've noticed in the last ten days or so that the price of both petrol and diesel has been steadily increasing at the pumps. In north leinster every petrol retailer I've passed has increased their prices practically every couple of days. At the beginning of January 2009 the average price for petrol was 89-91c now it's 95-99c. What's going on? International oil prices have not risen and as we were told by the AA it takes three weeks for the retail price to be affected by price rises on the wholesale market and in the middle of December 2008 the price of a barrel of oil was at an historic low.. There are five petrol retailers in or around the Blessington area of Co Wicklow and each one is charging exactly the same price for both petrol and diesel 97.9c. This has to be at the least 'profiteering' ,and certainly it's 'price fixing'. Don't these guys know that we are in a recession ?

I understand that the recent and on-going punch-up in the Middle-East is responsible for the increases.

techdiver

Very convenient that when the global oil price goes down it takes ages for the same reduction to be reflected at the pumps, but when the oil price goes up, the rip-off merchants are much more efficient at adjusting the price up-wards! :mad:

jor el

Crude oil price took a jump, about 2 weeks ago, from $35 to $50, but is now back to $35 again. I'd expect this jump is the reason for the price increase, but should only last another week or so, as prices have now dropped again.

It took about a week for the increase to arrive, so lets see how long the decrease takes. This weekend should see the prices dropping back towards 90c a liter again.

Bluetonic

techdiver wrote: »

Very convenient that when the global oil price goes down it takes ages for the same reduction to be reflected at the pumps, but when the oil price goes up, the rip-off merchants are much more efficient at adjusting the price up-wards! :mad:

Who exactly are you accusing of doing the ripping off?

darc

jor el wrote: »

Crude oil price took a jump, about 2 weeks ago, from $35 to $50, but is now back to $35 again. I'd expect this jump is the reason for the price increase, but should only last another week or so, as prices have now dropped again.

It took about a week for the increase to arrive, so lets see how long the decrease takes. This weekend should see the prices dropping back towards 90c a liter again.

Oil prices increased the week before xmas to $50. (that's about a 2 week lag)Brent is currently $42 but the dollar has gone from €1.48 pre xmas to €1.32 today. Also refined gasolione has not dropped as much as oil. (went from 90c / us gallon to 1.12 and now down at 1.06, So don't expect more than 1c /2c to come off next week.

Of the current average of 97c - 66c goes to government, (VAT 16c, Duty 50c) 21c for the fuel itself & 10c to retailer / distributor. - Hardly profiteering!!

delly

This post may explain:

http://www.boards.ie/vbulletin/showpost.php?p=58492769&postcount=1

juuge

darc wrote: »

- Hardly profiteering!!

Profiteering is profiteering irrespective of the amount!
My difficulty is trying to understand why the prices would increase every couple of days when retailers receive deliveries every three weeks or so. That to me is greed and guess what? people like yourself will continue to pay, whatever they charge. Nice one!

techie

A local garage to me here in West Cork last Friday was 92c/ so I filled up, on Saturday passed the same garage twice and both times the price had gone up , TWICE in the 1 day. Its now at 97c/l .

No delivery there either as I asked a member of staff!!!!!!!!!!!!! :mad:

darc

juuge wrote: »

Profiteering is profiteering irrespective of the amount!
My difficulty is trying to understand why the prices would increase every couple of days when retailers receive deliveries every three weeks or so. That to me is greed and guess what? people like yourself will continue to pay, whatever they charge. Nice one!

Garages in competitive areas play cat and mouse with each other. One raises by 2c and sees the reaction of the other. It they raise by more then garage 1 re-raises.

At the end of the day, if there was a real profit to be made from fuel retailing then the hundreds of garages which have closed would not have done so. Just realise that if petrol is €1, then 70 cent goes in duty & taxes!

My advantage is I live near an area which consistently has the lowest prices in Ireland - today diesel is 91.9 / 92.9 & petrol is 94.9 / 96.9 (Toghers, Statoil, King Oil & Texaco Athy) Last week it was 87.9 & 90.9.

juuge

darc wrote: »

if there was a real profit to be made from fuel retailing then the hundreds of garages which have closed would not have done so.

The majority of those garages closed because they were offered amazing amounts of money for the site during the celtic tiger, happy days.
The main area of business for garages is in the selling of convenience foods/items such as sandwiches,confectionery, lotto etc and of course coffee when they charge 2.50 for a cup of watery coffee and good luck to them. What I object to is profiteering in the area of petrol and diesel. Unlike a mars bar which we can decide whether or not to buy, we need fuel to get from a to b and I believe different rules should apply. Let them fiddle about with the price of donuts if they like but not fuel - our livelyhood depends on it.

rameire

juuge wrote: »

Profiteering is profiteering irrespective of the amount!
My difficulty is trying to understand why the prices would increase every couple of days when retailers receive deliveries every three weeks or so. That to me is greed and guess what? people like yourself will continue to pay, whatever they charge. Nice one!

where did you get this delivery time of every 3 weeks or so,
i use King Oil Athy (mentioned above, as cheap place) every second day and usually see the tanker filling the station up every 3 to 4 days.

and King Oil usually change their prices either when they get a delivery or when Texaco Athy get a delivery.

the groutch

the € has significantly weakened against both the £ and the $ in the last couple of weeks, which would account for most of the diff

P.C.

juuge wrote: »

Profiteering is profiteering irrespective of the amount!

Do you work?
Does your company make a profit?
Is that profiteering or business?

juuge wrote: »

My difficulty is trying to understand why the prices would increase every couple of days when retailers receive deliveries every three weeks or so. That to me is greed and guess what? people like yourself will continue to pay, whatever they charge. Nice one!

Which petrol station is this?
Some petrol station get two deliveries a day - is it ok for them to change their price every couple of days?

juuge

P.C. wrote: »

Do you work?
Does your company make a profit?
Is that profiteering or business?

There are very few if any, companies other than the oil industry that can get away with putting up their prices when they feel like it. That is not normal marketing behaviour. They do it because they know they can. So according to your logic if a garage retailer puts up his prices every second day it's because he is getting a delivery every two days - give me a break !

P.C.

juuge wrote: »

There are very few if any, companies other than the oil industry that can get away with putting up their prices when they feel like it. That is not normal marketing behaviour. They do it because they know they can. So according to your logic if a garage retailer puts up his prices every second day it's because he is getting a delivery every two days - give me a break !

What is normal business behavior for one industry is not normal in another industry.

If I want to fly from Dublin to Heathrow - why is it cheaper to fly on Tuesday midday than Friday evening?
Is that normal business practice?

Why does a pint cost me €4.50 at 9pm, but € 5.20 at 11pm and €5.50 at 1am?
Does this pub get three deliveries in one evening?

Agian:

Do you work?
What job do you do if you work?
If you work, does your company make a profit?
Is this profiteering?

Petrol station put up their prices for lots of different reasons - some of them cost driven, some of them profit driven.
It might seem like I am defending them, ok, so be it - but I do understand a little bit about the industry, and understand that they do not make much money on petrol sales.

P.C.

Here is a post from the motors forum that makes for interesting reading:

http://www.boards.ie/vbulletin/showpost.php?p=58578426&postcount=129

green123

techie wrote: »

A local garage to me here in West Cork last Friday was 92c/ so I filled up, on Saturday passed the same garage twice and both times the price had gone up , TWICE in the 1 day. Its now at 97c/l .

No delivery there either as I asked a member of staff!!!!!!!!!!!!! :mad:

did people miss this point ?

garages put up prices before new stock arrives.
they seem to put the price up when there is even talk of oil going up, but are very very slow to bring the price down

darc

juuge wrote: »

There are very few if any, companies other than the oil industry that can get away with putting up their prices when they feel like it. That is not normal marketing behaviour. They do it because they know they can. So according to your logic if a garage retailer puts up his prices every second day it's because he is getting a delivery every two days - give me a break !

juuge - spend about 2 hours doing some research on this subject. Check what sort of rent you'll be charged for a garage forecourt (plenty for sale around the country), check the commercial rates for the site, then add in utility bills, staffing costs, accountancy costs plus don't forget the 1% credit card cost.

Then check out the wholesale price of the fuel (currently about 25c per litre), then check out the world refined price for unleaded petrol (can be checked on hundreds of internet sites) - today its about 21c per litre and has been around this level for the past 2 weeks (don't forget there's just 3.8 litres to a US gallon & the dollar is at 1.31 today).

So the wholesaler makes 4c per litre to unload it from the oil tankers, store in their mega tanks in the port, to dispense it to the road tankers which then bring it to local garages up and down the country. - whoops, forgot to add in marketing cost, staffing costs & office costs.

add in 50c duty - we're at 75c now. Whoops, don't forget the vat @ 21.5%, thats 91c per litre before the forecourt owner takes into account ANY cost whatsoever.

Today, prices vary between 94c & 99c per litre, which means that garages are PROFITEERING by a WHOLE 2c to 7c (net of VAT) on a liter of petrol.

Of course all forecourt workers don't want to be paid for their work & the landlords are giving the sites rent free so that mr forecourt owner can make a gross 2% - 5% profit margin on the fuel.


BTW - Debenhams had a gross margin of 56% last year!!!!!!
The average bank makes a 60% profit margin on homeloans!

juuge

darc wrote: »

juuge - spend about 2 hours doing some research on this subject. Check what sort of rent you'll be charged for a garage forecourt (plenty for sale around the country), check the commercial rates for the site, then add in utility bills, staffing costs, accountancy costs plus don't forget the 1% credit card cost.

Then check out the wholesale price of the fuel (currently about 25c per litre), then check out the world refined price for unleaded petrol (can be checked on hundreds of internet sites) - today its about 21c per litre and has been around this level for the past 2 weeks (don't forget there's just 3.8 litres to a US gallon & the dollar is at 1.31 today).

So the wholesaler makes 4c per litre to unload it from the oil tankers, store in their mega tanks in the port, to dispense it to the road tankers which then bring it to local garages up and down the country. - whoops, forgot to add in marketing cost, staffing costs & office costs.

add in 50c duty - we're at 75c now. Whoops, don't forget the vat @ 21.5%, thats 91c per litre before the forecourt owner takes into account ANY cost whatsoever.

Today, prices vary between 94c & 99c per litre, which means that garages are PROFITEERING by a WHOLE 2c to 7c (net of VAT) on a liter of petrol.

Of course all forecourt workers don't want to be paid for their work & the landlords are giving the sites rent free so that mr forecourt owner can make a gross 2% - 5% profit margin on the fuel.


BTW - Debenhams had a gross margin of 56% last year!!!!!!
The average bank makes a 60% profit margin on homeloans!

Gosh and there was me complaining just because a garage increased his prices on Friday 9th/ Monday 12th and Wednesday 14th. what was I thinking ??

Tester46

darc wrote: »

Of the current average of 97c - 66c goes to government, (VAT 16c, Duty 50c) 21c for the fuel itself & 10c to retailer / distributor. - Hardly profiteering!!

It bloody is IF (and I say IF) they have a disproportionate profit element. Also, how is it that in many towns, every single petrol station has petrol and diesel at exactly the same price, down to a tenth of a cent?

Is anyone seriously expected to believe this isn't unofficial price fixing? Where is the competition authority - a few prosecutions might sort this criminality out.

Tester46

darc wrote: »

juuge - spend about 2 hours doing some research on this subject. Check what sort of rent you'll be charged for a garage forecourt (plenty for sale around the country), check the commercial rates for the site, then add in utility bills, staffing costs, accountancy costs plus don't forget the 1% credit card cost.

Then check out the wholesale price of the fuel (currently about 25c per litre), then check out the world refined price for unleaded petrol (can be checked on hundreds of internet sites) - today its about 21c per litre and has been around this level for the past 2 weeks (don't forget there's just 3.8 litres to a US gallon & the dollar is at 1.31 today).

So the wholesaler makes 4c per litre to unload it from the oil tankers, store in their mega tanks in the port, to dispense it to the road tankers which then bring it to local garages up and down the country. - whoops, forgot to add in marketing cost, staffing costs & office costs.

add in 50c duty - we're at 75c now. Whoops, don't forget the vat @ 21.5%, thats 91c per litre before the forecourt owner takes into account ANY cost whatsoever.

Today, prices vary between 94c & 99c per litre, which means that garages are PROFITEERING by a WHOLE 2c to 7c (net of VAT) on a liter of petrol.

Of course all forecourt workers don't want to be paid for their work & the landlords are giving the sites rent free so that mr forecourt owner can make a gross 2% - 5% profit margin on the fuel.


BTW - Debenhams had a gross margin of 56% last year!!!!!!
The average bank makes a 60% profit margin on homeloans!

Boo Hoo Hoo! If they don't like it, get out of the petrol business. Don't whinge about it. If it's such a low profit business, then how come so many individual garage owners are loaded? Darc, that's nonsense and you know it.

darc

Tester46 wrote: »

Boo Hoo Hoo! If they don't like it, get out of the petrol business. Don't whinge about it. If it's such a low profit business, then how come so many individual garage owners are loaded? Darc, that's nonsense and you know it.

Beacuse they run busy convienence stores attached. The figure I have provided are PRECISE figures as of 2 days ago.

International prices for refined fuel rose yesterday to 23c / litre for petrol & 30c per litre for Diesel. Expect another 2c to to go onto the price in the ext few days. Most petrol is refined from the lighter & cleaner Brent Crude which is at $47 today.


btw - i don't own, work or have any interests in the fuel business whatsoever. Last year I was pissed about the increases, (it cost over €100 to fill the car at one stage!) but decided to check the real figures myself before moaning about them. - And I was very surprised at how tiny the fuel profits were and realised that a single sandwich @ €4 made a bigger gross profit than €50 of petrol for the stations at the lower price levels.

juuge

Tester46 wrote: »

It bloody is IF (and I say IF) they have a disproportionate profit element. Also, how is it that in many towns, every single petrol station has petrol and diesel at exactly the same price, down to a tenth of a cent?

Is anyone seriously expected to believe this isn't unofficial price fixing? Where is the competition authority - a few prosecutions might sort this criminality out.

Dead right !
The way to settle this is through the revenue - let them have a look!

darc

Tester46 wrote: »

It bloody is IF (and I say IF) they have a disproportionate profit element. Also, how is it that in many towns, every single petrol station has petrol and diesel at exactly the same price, down to a tenth of a cent?

I live near Carlow & work near kildare town - I pass 9 fuel stations a day on my regular trip to the office, many more when travelling to another office in Athlone, I fill up with 60 or so litres about twice a week. If one station is even half a cent cheaper, I will use that one. Many other heavy users of fuel do the same. Therefore all stations in the same area watch each other's prices and match them closely.

For UK comparison as of today's average UK price of 88p stg per litre - Net of duty (53.65pstg) & VAT (15%) UK = 32c (28.8p stg)

Ireland @ 97c per litre - Price net of vat & duty = 29.5c

P.C.

Tester46 wrote: »

It bloody is IF (and I say IF) they have a disproportionate profit element. Also, how is it that in many towns, every single petrol station has petrol and diesel at exactly the same price, down to a tenth of a cent?

Is anyone seriously expected to believe this isn't unofficial price fixing? Where is the competition authority - a few prosecutions might sort this criminality out.

Why are newspapers sold at the same price in every shop?
Is anyone seriously expected to believe this isn't unofficial price fixing? Where is the competition authority - a few prosecutions might sort this criminality out.

Petrol is petrol is petrol. You and I will go where it is cheapest.
So, what would one petrol station gain in charging more or less?

If they charge less, they will increase their business untill the petrol stations around them drop their price, and then things go back to normal. So, there is actually an incentive for petrol stations to charge as cheap a price as they can, but all the petrol stations around them will match their price.

Tester46 wrote: »

Boo Hoo Hoo! If they don't like it, get out of the petrol business. Don't whinge about it. If it's such a low profit business, then how come so many individual garage owners are loaded? Darc, that's nonsense and you know it.

Yet everytime a 'local' petrol station closes down, there is a huge out cry?
You can't eat your cake and have it.

juuge wrote: »

Dead right !
The way to settle this is through the revenue - let them have a look!

You do know that all the major players were called in fron of the government to explain the petrol price.
The joke of it was that they had to explain the tax on petrol to the government.

By the way juuge you still have not answered my questions:

Do you work?
If you work, what job do you do?
If you work, does the compant you work for make a profit?
Is this profiteering?

juuge

juuge wrote: »

a garage increased his prices on Friday 9th/ Monday 12th and Wednesday 14th.

Gone up again this morning Friday 16th. and now resting at 99.9c. The outlet by the way is Topaz Main Street Blessington, Co.Wicklow.

ch750536

I did some work for shell some time ago (8yrs or so) on their forecourt strategy model. This is a very complex bit of maths that defines the prices they charge for fuel at each forecourt in the UK, when they change and by how much.

Personally I found rocket science easier.

But as a summary, 60% of the pricing model reflected location to other forecourts and their prices, 30% what the market can take, 10% the price of fuel.

Essentially profit does not really come in to the equation, they would operate at a loss on fuel if their competitors did.

Not that this helps you much.

juuge

ch750536 wrote: »

Not that this helps you much.

No ! It does help. I pass through Blessington every morning on my way to Dublin and there are three petrol retailers in the town and the all charge exactly the same for both petrol and diesel, so no choice there for the locals. I always pass them in favour of Dublin prices which on average are 5-8c per litre cheaper, so a good saving there on a fill up.

P.C.

juuge wrote: »

Gone up again this morning Friday 16th. and now resting at 99.9c. The outlet by the way is

Topaz Main Street

Blessington, Co.Wicklow.

Not just one, but

juuge wrote: »

I pass through Blessington every morning on my way to Dublin and there are three petrol retailers in the town and the all charge exactly the same for both petrol and diesel, so no choice there for the locals. I always pass them in favour of Dublin prices which on average are 5-8c per litre cheaper, so a good saving there on a fill up.

What is the difference between the petrol in the three different sites?

Jeapy

darc wrote: »

Garages in competitive areas play cat and mouse with each other. One raises by 2c and sees the reaction of the other. It they raise by more then garage 1 re-raises.

At the end of the day, if there was a real profit to be made from fuel retailing then the hundreds of garages which have closed would not have done so. Just realise that if petrol is €1, then 70 cent goes in duty & taxes!

My advantage is I live near an area which consistently has the lowest prices in Ireland - today diesel is 91.9 / 92.9 & petrol is 94.9 / 96.9 (Toghers, Statoil, King Oil & Texaco Athy) Last week it was 87.9 & 90.9.

It was 93.9 for petrol and diesel in Claremorris 2 weeks ago and it hasnt increased. There's even an offer, spend 40 euro in Supervalu, get 10c/L off up to 60 litres. Not bad!