Oil how high will it go?

[Sunny]

Ok, not a forecourt owner, but here goes in trying to create a straightforward explanation.

When Oil was $147 a barrell, it was converting to about €91

Now $98 is converting to about €73. So while the barrell dropped by €18 (19%) the price you paid has dropped by 10 cent per litre or 8%. You also need to take into account that some of these stations may have purchased their fuel nearly a week ago, when the barrell was about $7-8 higher.

Not in any way defending the pricing of Petrol or Diesel, but just trying to explain how the different aspects of the world economy affect our buying prices!!

I understand what you are saying but to be fair to the people complaining about it, when oil was going up in price, the dollar was getting weaker and yet the consumer was still hit with the full impact of oil price rises.

There are economic factors at play but there is no doubt that retailers/ oil companies must be trying to have higher margins for as long as possible and I can't blame them. I would only have a problem if it was proven that garages/ oil companies were engaging in anti-competitive behaviour but there is no evidence of that as far as I know.

 

[ubiquitous]

I understand what you are saying but to be fair to the people complaining about it, when oil was going up in price, the dollar was getting weaker and yet the consumer was still hit with the full impact of oil price rises.

But as someone else pointed out previously, either on this or a similar thread, when oil rose in price by 50% in the first 6-7 months of this year, the price at the pumps did not go up by 50% or anything like it.

There are economic factors at play but there is no doubt that retailers/ oil companies must be trying to have higher margins for as long as possible and I can't blame them.

The odd thing is that if there are massive profits to be made in selling petrol & diesel, how does that explain the fact that large numbers of filling stations are being closed down on a regular basis? I mentioned elsewhere the example of Killeshandra Co Cavan where the two filling stations in the area have both closed down within the past 15 months and remain closed. If there were any significant profits to be made, these would have reopened by now. The nearest filling station from the town are in Ballyconnell in one direction, 8 miles away, and Cavan town in the other, 12 miles away.

I would only have a problem if it was proven that garages/ oil companies were engaging in anti-competitive behaviour but there is no evidence of that as far as I know.

The whole question of anti-competitive practices is imho a bit redundant given the fact that filling stations make practically all their profits from deli/confectionery/hot food/grocery sales on the forecourt, and there is no shortage of competition for that trade.

 

[RMCF]

I understand what you are saying but to be fair to the people complaining about it, when oil was going up in price, the dollar was getting weaker and yet the consumer was still hit with the full impact of oil price rises.

There are economic factors at play but there is no doubt that retailers/ oil companies must be trying to have higher margins for as long as possible and I can't blame them. I would only have a problem if it was proven that garages/ oil companies were engaging in anti-competitive behaviour but there is no evidence of that as far as I know.

I have lived in RoI for approx 7 years and have noticed that the 3 petrol stations in my locality have ALWAYS had the EXACT same price for unleaded and diesel. They are 3 different companies (Shell, Texaco, Top).

Why would the prices NEVER be different? Because, I believe, they operate price-fixing.

 

[ubiquitous]

I have lived in RoI for approx 7 years and have noticed that the 3 petrol stations in my locality have ALWAYS had the EXACT same price for unleaded and diesel. They are 3 different companies (Shell, Texaco, Top).

Why would the prices NEVER be different? Because, I believe, they operate price-fixing.

Do they happen to be owned by the same person/company? One guy owns 4 of the top 6 filling stations in Cavan town, each with different oil companies. He can hardly be accused of illegal price-fixing if he charges uniform prices across all 4 outlets.

 

[Pique318]

Do they happen to be owned by the same person/company? One guy owns 4 of the top 6 filling stations in Cavan town, each with different oil companies. He can hardly be accused of illegal price-fixing if he charges uniform prices across all 4 outlets.

Not 'he'...'they'. The oil companies would be the ones to look at,

On another note, a family member is involved in the oil industry and tells me that the fuel coming off the one ship pours into different oil companies bowsers...explain that one while paying more for Shell than Top !

 

[RMCF]

Do they happen to be owned by the same person/company? One guy owns 4 of the top 6 filling stations in Cavan town, each with different oil companies. He can hardly be accused of illegal price-fixing if he charges uniform prices across all 4 outlets.

No, 3 different owners, but it is a small town and I would say there is the odd phone call made late at night with the question, "so what are we charging tomorrow?".

 

[ubiquitous]

Not 'he'...'they'. The oil companies would be the ones to look at,

Can the oil suppliers dictate to station owners how much to charge? I would have thought that this would be anti-competitive. After all, Diageo cannot dictate to a publican how much to charge for Guinness.

On another note, a family member is involved in the oil industry and tells me that the fuel coming off the one ship pours into different oil companies bowsers...explain that one while paying more for Shell than Top !

Fwiw, the Top station in my neck of the woods is rarely cheaper than the others.

No, 3 different owners, but it is a small town and I would say there is the odd phone call made late at night with the question, "so what are we charging tomorrow?".

Quite possible, but also highly illegal and quite likely to get the owners into serious doo-doo if detected. Smarter and more legal for X to keep an eye on Y's price displays every day and adjust their own prices accordingly every time Y's prices change.

 

[hjrdee]

Not 'he'...'they'. The oil companies would be the ones to look at,

On another note, a family member is involved in the oil industry and tells me that the fuel coming off the one ship pours into different oil companies bowsers...explain that one while paying more for Shell than Top !

Surely you can see that this is down to price negiotiations on the part of the purchasers...Top may have negiotiated a better purchasing deal than Shell and thus are better able to pass on the costs. Did you think that every fuel distributor paid the same purchase price of fuel?? There are difference in purchasing power, obviously the bigger the distributor the better buying power they have, similar to a tesco buying situation. This is no different to any other product sold, only people seem to get more excited about forecourt prices. And, still the only product sold in a convenience store that must by law have its price displayed outside its shop....(other than Alcohol)

 

[Pique318]

I was talking about the perception of Shell/Esso/Texaco being somehow 'better' fuels than Top/Go/etc...yet the fuel is exactly the same apart from a few litres of some additives thrown into a 30000 litre tanker. Thank you but I'd prefer the couple of pence/litre in my pocket and pay for a bottle of additive every year if necessary to clean the injectors (not that it's even necessary). I'd still save money.

Advertising obviously works s'pose, that's why Shell spend so much on it. In fairness they probably need more positive publicity in Ireland than most !

 

[ubiquitous]

Advertising obviously works s'pose, that's why Shell spend so much on it. In fairness they probably need more positive publicity in Ireland than most !

They don't even trade in Ireland anymore. And their project in Mayo remains stalled. And we still have a national energy dependency problem...which you won't read about in indymedia...