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Price of Oil Continues to Drop, Yet Petrol/Diesel Prices Have Started to Increase

  • 24-02-2015 8:32am
    #1
    Registered Users Posts: 607 ✭✭✭ hadoken13


    Towards the end of last year and for the start of this year, the price of petrol and diesel started to drop. Considering that oil prices are continuing to fall, it doesn't make sense that petrol/diesel prices have started to rise.

    In Newbridge, where I buy diesel, the price has increased by about 5c per litre over the last couple of weeks. Considering fuel companies say that it takes about 3 - 6 months for consumers to see prices reflecting oil prices, shouldn't petrol/diesel prices be falling, not increasing?


Comments

  • Registered Users Posts: 12,615 ✭✭✭✭ whiskeyman


    Euro is falling hard against the dollar recently.


  • Registered Users Posts: 14,167 ✭✭✭✭ Vicxas


    The "Big Oil" have said there will be a shortage next year due to shutting of rigs, coupled with the falling Euro it'll always have Petrol stations salivating.


  • Registered Users Posts: 607 ✭✭✭ hadoken13


    Ye but according to fuel companies it takes months for these issues to take effect. So prices should still be falling or at least remaining steady (although the currency issue may have effect).


  • Registered Users Posts: 14,167 ✭✭✭✭ Vicxas


    hadoken13 wrote: »
    Ye but according to fuel companies it takes months for these issues to take effect. So prices should still be falling or at least remaining steady (although the currency issue may have effect).

    The problem is always knee jerk for upward trends and a reluctance to drop prices when the price of a barrell falls.

    Greed is a powerful thing.


  • Registered Users Posts: 5,422 ✭✭✭ daheff


    from my understanding of how the oil/petrol correlation works is that it takes a couple of weeks for price drops to hit the pumps.


    Oil has increased/ EUR/USD rate dropped about 2-3 weeks ago (oil went from 44 to around 52.50, EUR/USD went from 1.14 to 1.13....and stayed there for the last while.


    only in the last few days both have reversed these prices in the last few days.

    so I'd expect about 3-4 c to drop off the price of a litre come end next week/early the week after (assuming that the prices don't go back up again).


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  • Registered Users Posts: 1,394 Sheldons Brain


    Why do we continually get these threads that compare the change of the price of oil in dollars and then the change in the retail price in Euros. If you want to make a point then use the same currency!!


  • Registered Users Posts: 3,885 ✭✭✭ pa990


    Why do we continually get these threads that compare the change of the price of oil in dollars and then the change in the retail price in Euros. If you want to make a point then use the same currency!!

    Because Oil is Traded in $ 's, but we buy the refined product in € 's


  • Registered Users Posts: 20,123 ✭✭✭✭ jimgoose


    Vicxas wrote: »
    The problem is always knee jerk for upward trends and a reluctance to drop prices when the price of a barrell falls.

    Greed is a powerful thing.

    Economists call that Nominal Rigidity, or "price stickiness".


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