Why are we paying 1.50 for petrol

cgarrad · 20-03-2011 01:08AM

At 53.26c a litre petrol is a bargain. It's cheaper than Coke, milk and orange juice yet multiple times more useful.

Tax puts up the price but people have it in their heads that it's greedy financiers.

As usual the root of the problem is government but you have all been deflected by their spin.

We are going to default if oil stays at €100-€120 due to no growth.

Blame whoever but it's politicians fault plain and simple.

jett · 20-03-2011 01:45AM

all means that british chancellor Norman Lamont was right when he said back in the early 90s " tax is so high that it now brings in diminishing returns" Or words to that effect.
not forgetting that the Oil companies profit goes up thus the goverment Makes more on corporation tax.
6 years ago petrol was 20% cheaper here than in the UK. Now its the same.
That means the government is charging more tax than before.
The politicians claim their travelling expenses at the cost of the taxpayer.
The taxpayer pay their own travelling costs at full rate.
Think about it!

Danno · 20-03-2011 12:17PM

The govt should 0% VAT fuel, remove carbon taxes and charge excise duty at a set rate per litre.

If mad-mahullah out in some sand dune decides to blow the bejaysus out of some pipe line and the price of a barrel goes up, then the govt don't get a sweet little extra earner on account of it.

This policy needs to be EU-Wide also.

Alun · 20-03-2011 04:08PM

Danno wrote: »

The govt should 0% VAT fuel, remove carbon taxes and charge excise duty at a set rate per litre.

They already do!!! See the Revenue website if you don't believe it.

sandin · 20-03-2011 04:15PM

eas wrote: »

I don't doubt the margins on the sandwich and Coke, I just highly doubt they make up more profit on a whole than petrol.

The 6c/ltr figure I used was read either on this thread or another thread of similar topic. Thinking about it, seeing as how there's more than a 10c spread on pump prices around the country, I'm thinking that 6c may be a modest estimate. But again, I'm just a guy making guesses.

I know someone that has a fuel station and their current "profit" on a litre of petrol is 3c. On Diesel its 4c. They currently sell petrol at 1.49.9 and diesel at 1.44.9
The only reason he's selling fuel is to get people into his shop to buy anything from newspapers to beer. 1% Credit card charge takes 1.5c, leaving 1.5c for all other costs associated with the fuel.

Without the fuel, he'd have very few customers, so he sees it as simply a way of getting footfall into the store.

btw - he hates the high prices as much as anyone else as people are driving less and therefore visiting him less, and so less chances to sell a bottle of coke / sandwich.

And yes there is more "Gross Profit" in sandwiches, but you need to factor in staff, food wastage, food regulations etc and the bread used for commercial sandwiches is more expensive than normal bread. (Its heavier & denser in order to keep shape), but still this and confectionery & soft drinks is where he makes the money to pay for staff, rent etc.

sandin · 20-03-2011 04:17PM

Danno wrote: »

The govt should 0% VAT fuel, remove carbon taxes and charge excise duty at a set rate per litre.

If mad-mahullah out in some sand dune decides to blow the bejaysus out of some pipe line and the price of a barrel goes up, then the govt don't get a sweet little extra earner on account of it.

This policy needs to be EU-Wide also.

The only variables in the fuel price is cost from refinery & vat. Everything else remains relatively static.

kippy · 20-03-2011 04:22PM

sandin wrote: »

The only variables in the fuel price is cost from refinery & vat. Everything else remains relatively static.

The problem is, that static is a percentage. And some of the taxes are taxes on taxes.
A one cent rise in a litre of petrol from the refinery will lead to a 3 cent rise at the pumps.

Alun · 20-03-2011 04:25PM

It's also worth mentioning that the cost from the refinery of the petrol that goes into your tank doesn't follow the spot price of crude oil as faithfully as some feel it ought to. There's refining costs, currency fluctuations, transport costs to take into account, but also the fact that to protect themselves against short term fluctuations all kinds of complex futures buying and currency hedging goes on on the markets which complicates matters enormously.

Alun · 20-03-2011 04:37PM

kippy wrote: »

The problem is, that static is a percentage. And some of the taxes are taxes on taxes.
A one cent rise in a litre of petrol from the refinery will lead to a 3 cent rise at the pumps.

The duty on fuel is a fixed amount per litre not a percentage.

kippy · 20-03-2011 04:45PM

Alun wrote: »

The duty on fuel is a fixed amount per litre not a percentage.

Fair point.
http://www.ipia.ie/Issues/upload/What_determines_pump_prices.pdf
A fairly good outline of fuel prices - probably posted before.

Alun · 20-03-2011 04:56PM

Which means that a 1c increase in petrol prices at the refinery gates (i.e. NOT spot crude oil prices!) will result in a price increase of 1.21c, not 3c.

kippy · 20-03-2011 05:01PM

Alun wrote: »

Which means that a 1c increase in petrol prices at the refinery gates (i.e. NOT spot crude oil prices!) will result in a price increase of 1.21c, not 3c.

You got me.

Alun · 20-03-2011 05:03PM

kippy wrote: »

You got me.

Now, spread the word.

kippy · 20-03-2011 05:05PM

Alun wrote: »

Now, spread the word.

Cheers for the clarification.
So the only variable tax on fuel is the VAT rate?

Pacing Mule · 20-03-2011 05:08PM

kippy wrote: »

Fair point.
http://www.ipia.ie/Issues/upload/What_determines_pump_prices.pdf
A fairly good outline of fuel prices - probably posted before.

Interesting footnote to that is the amount of garage closures in recent years.

Alun · 20-03-2011 05:17PM

kippy wrote: »

Cheers for the clarification.
So the only variable tax on fuel is the VAT rate?

Yes.

However one thing not to forget is that there is a difference between the cost of petrol at the refinery gates and crude oil prices. Refinery costs, seasonal demand, transport costs, currency fluctuations, commodity market vagaries and a whole raft of complex financial instruments (futures, currency hedging etc.) designed to reduce the effects of changes in these factors, all conspire to mean that a 1c change in crude prices (up or down) doesn't result in an equal corresponding increase or decrease in the cost of the final product, i.e. petrol or diesel. So a 1c increase in the cost of crude could possibly result in a larger increase in the final cost of the fuel at the forecourt.

sandin · 20-03-2011 05:22PM

Fixed = 59.6c made up of duty, National reserves agency levy, Carbon tax. + 21% Vat on this.

Fixed = distribution cost / retailer margin. Estimated at a combined 10c + Vat

Fixed (within a cent or so depending on demand & seasonal factors) = cost of refining oil into petrol. Estimated at approx 6c per litre + vat on that

Only Variable = cost of raw material. Currently $112 per barrel. (49c)

So if oil rose by $10, the pump price would rise by approx 4.8c + vat (5.8c)

If oil dropped tomorrow by $10, the forecourt price would only drop by 5.8c.

If oil doubled in price tomorrow, the pump price would only increase by 58c, not €1.50.

Hopefully, this clears a lot up for many.

PDD · 20-03-2011 06:01PM

Its quite simple, the first is carbon bull**** which I think accounts for something like 15c for every litre which I think is absolute lunacy and for my part I want to know just where that money is going. (Im not getting into any kind of discussion regarding anthroprogrenic global warming scam everyone is entitled to their opinion)

Secondly as you've seen the figures above a greedy government, who introduced VAT increases on petrol/diesel during the boom times while no one cared cos the money was there to pay for it. Now the government is strapped for cash and they are totally dependent on income from these high taxes.

All you have to do is look at their deals with NTR and the M50 toll bridge, it is in the contract that the government at any time can reduce the toll fee to whatever they wish (including nothing) but they don't do it because they get NTR to be the public bad guys while they take 50% of the income from tolls. Even long long after bridges have paid for themselves several times over. And yet again citizens are left paying all of these stealth taxes because previous governments decisions regarding economic policy and the moronic decision to assume bank debt as soverign debt has left this governement dependent on all of these types of revenue to stay afloat.

sandin · 20-03-2011 06:16PM

PDD wrote: »

Its quite simple, the first is carbon bull**** which I think accounts for something like 15c for every litre which I think is absolute lunacy .

Its approx 4c / litre

as for "greedy government" and "stealth taxes", basically we're still not collecting enough. If it comes off fuel, its added on somewhere else.

Also, all taxes in Ireland are Universal Taxes, so fuel tax isnt reserved for motoring, cigarette taxes isn't reserved for health etc.

Maybe cut the unemployment benefit to the UK level of €75? - But that would be unfair to those who can't find a job.

Maybe cut the pension to UK levels of €100, but that would be unfair to pensioers who have paid taxes all their lives

Maybe charge school fees to everyone - but then we'd have a more poorly educated workforce and we'd really be in the crapper in a few years.

We do pay for all of the above, but in a piecemeal manner over many years via taxes. Its not greedy government, its simply the cost of what the state provides for us.

juuge · 21-03-2011 10:59PM

There's a garage near James Street in Dublin and today he's selling diesel @ 139.9 our local garage in wicklow is selling today @ 149.9. One garage has queues outside and the other doesn't now which is the better business man?

jett · 22-03-2011 02:32AM

Correct me if I am wrong but there was a 13c and a 6c + vat tax rise over the last 2 budgets, or near that amount?
The tax is stiffling the countries recovery!

cgarrad · 22-03-2011 11:28AM

Not only is the price of a barrel of oil traded, the distillates produced from it (petrol, diesel etc.) are traded again on secondary markets.

This leads to divergences in the cost of oil and its by products.

It was seen clearly in the last 2 years by the massive uptake in diesel cars that created new demand.

Dymo · 22-03-2011 03:11PM

The euro is the strongest ever against the dollar, I wonder what will the price be when the euro weakens?

cgarrad · 22-03-2011 03:18PM

Dymo wrote: »

The euro is the strongest ever against the dollar, I wonder what will the price be when the euro weakens?

It hit 1.60 before the crisis, at 1.42 now.

And its about to plunge to 1.35 over the next few days...

sandin · 22-03-2011 03:27PM

cgarrad wrote: »

It hit 1.60 before the crisis, at 1.42 now.

And its about to plunge to 1.35 over the next few days...

It could be $1.45 next week or it could be $1.35 or it may stay around $1.41 / $1.42

Currency speculation in current market conditions has flummoxed even the most hardened speculator and us mere amateur mortals would only be making a guess.

Todays 1.2c drop was caused purely by an unfounded rumor that Ireland missed a repayment. (None due this week - so can't be true)

Skopzz · 26-03-2011 09:57AM

Home heating Oil now works out cheaper to buy from Northern Ireland, as people in parts of Leitrim are now buying it. Duty differences along with a lack of competition mean it's EUR 224.00 cheaper to buy from a tanker from the north. Also helped in part by Green Party John Gormley's stupid carbon tax, aided by fuel merchants pinching up the price:

http://www.leitrimobserver.ie/news/local/customs_set_to_crack_down_on_home_heating_oil_smuggling_1_2505934

davo10 · 26-03-2011 03:00PM

Skopzz wrote: »

Home heating Oil now works out cheaper to buy from Northern Ireland, as people in parts of Leitrim are now buying it. Duty differences along with a lack of competition mean it's EUR 224.00 cheaper to buy from a tanker from the north. Also helped in part by Green Party John Gormley's stupid carbon tax, aided by fuel merchants pinching up the price:

http://www.leitrimobserver.ie/news/local/customs_set_to_crack_down_on_home_heating_oil_smuggling_1_2505934

Skopzz, I'm convinced you cannot help yourself, the article is about the ILLEGALITY of this practice and how revenue are cracking down on it, the way you posted it you seem to be saying this is what everyone should be doing it. Enough of this BS.

sandin · 26-03-2011 06:04PM

Skopzz wrote: »

Home heating Oil now works out cheaper to buy from Northern Ireland, as people in parts of Leitrim are now buying it. Duty differences along with a lack of competition mean it's EUR 224.00 cheaper to buy from a tanker from the north. Also helped in part by Green Party John Gormley's stupid carbon tax, aided by fuel merchants pinching up the price:

http://www.leitrimobserver.ie/news/local/customs_set_to_crack_down_on_home_heating_oil_smuggling_1_2505934

One thing I learnt a long long time ago. Don't believe what is written in nespapers and belive less of whats wriiten in regional papers as many "stories" are very poorly researched and rarely tell the full truth.

This is a classic example.

Using the internet, you can get real time prices for nearly everything in every corner of the world.

1000 litres of kerosene currently costs between €830 - €860 in Republic of Ireland. This includes VAT at 13.5% and carbon tax at 4c per litre.

1000 litres of kerosene in Northern Ireland currently costs between £605 and £630. (€704 - €740) No carbon tax, 5% VAT.

A difference of €125 which is made of purley of different taxes.

Lets look at diesel
In NI 1000 litres of road diesl currently costs £1420 - about €1650.00
Locally here to me, 1000 litres of road diesel costs €1429.00

Different countries have different taxes on different goods, even within that same product group. Hence you have a difference in prices.

gflood · 29-03-2011 01:29AM

Less than 2% of oil comes from Libya. And this is more than offset with the reduction in consuption due to the Japan earthquake. So it should be cheaper not dearer ...

Its pure bloody ripoff.

Panrich · 04-04-2011 09:39PM

You see, I would have more sympathy with the retailers and their crocodile tears that the international price of oil is the cause of the high prices if....... ALL the petrol stations in my area didn't jump from 132.9 to 142.9 on the day after the budget.

Why are we paying 1.50 for petrol

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