Historic Low Oil Price

[rudds1 102]

Oil prices have hit an all time low -37 dollars.  Should we have lower prices at the pumps as a result of this ? Although I doubt we will see it ourselves 

[Padders 2,866]

29 minutes ago, rudds1 said:

Oil prices have hit an all time low -37 dollars.  Should we have lower prices at the pumps as a result of this ? Although I doubt we will see it ourselves 

Now down to 20 dollars Rudds, Forecasters say price at the pumps will fall to under £1 a litre.

[rudds1 102]

17 minutes ago, Padders said:

Now down to 20 dollars Rudds, Forecasters say price at the pumps will fall to under £1 a litre.

Prices are at minus 37 dollars pads. Let’s hope prices come right down 

[butlers 261]

About 80 percent of the pump price is tax so can't imagine there will be  a huge mark down.

 

[Padders 2,866]

13 minutes ago, rudds1 said:

Prices are at minus 37 dollars pads. Let’s hope prices come right down 

The trouble is prices will fall, because we don't need petrol, nowhere to drive to cus of the lockdown..

As soon as we get back to normal , prices will get back to normal, no win situation i'm afraid.

[Resident 1,193]

22 minutes ago, butlers said:

About 80 percent of the pump price is tax so can't imagine there will be  a huge mark down.

 

Makes it worse when you realise that there are 2 taxes on fuel, Duty and VAT. Worse still is that we pay VAT on the Duty, literally paying tax on a tax.

 

Based on Petrol at 110.1/L, following is per litre

 

Product: 11.7p

Distrib: 1.9p

Retail (Forecort inc profit): 20.20p

Duty: 57.95p

VAT: 18.3p

 

If the Government was fair (and to be frank I can't see how it's legal to tax a tax) the above, if we apply VAT to the total excluding Duty then add the duty the price per litre would be 98.5p. A difference of 11.6p per litre. *

We, the end consumer won't see any of this saving, quite the opposite. Companies will stockpile it and claim the cost of storage is high to keep prices up. We'll burn through the stockpile and producers, after back-channel dicussions, will be slow to ramp up production again to required levels. 

Cheap oil now will mean we'll be looking at 140p/150p per litre in the near future. 

 

Mark my words. 

 

 

* Figures taken from RAC Foundation (Link)

Edited April 21, 2020 by Resident

[andyofborg 11]

8 hours ago, Resident said:

 

If the Government was fair (and to be frank I can't see how it's legal to tax a tax) the above, if we apply VAT to the total excluding Duty then add the duty the price per litre would be 98.5p. A difference of 11.6p per litre. *

i think the retailer doesn't actually pay the duty but it's a cost levied at some point earlier in the supply chain. trying to separate the two like you suggest would be tricky and anyway all the government would need to do is adjust the rates to make sure the payment stayed the same.

Quote

Companies will stockpile it

The reason why prices are low is that storage is full which is a result of supply and demand being out of step

 

and also don't forget that the tax from fuel goes to provide public services such as the NHS etc.

Edited April 22, 2020 by andyofborg

[El Cid 220]

2 hours ago, andyofborg said:

and also don't forget that the tax from fuel goes to provide public services such as the NHS etc.

The 2008 financial crisis and the reccession that followed had a pronounced negative impact on the oil and gas sector as it led to a steep decline in oil and gas prices and a contraction in credit.

[geared 317]

On 21/04/2020 at 23:11, Resident said:

Cheap oil now will mean we'll be looking at 140p/150p per litre in the near future. 

 

 

 

Highly unlikely we'll see it in the near future, the markets are completely awash with oil to the point there's no-where to store it in the states.

OPEC+ did agree a 10% output cut, but that was on the back of a Saudi Arabia turning the taps to max and flooding the market right as Coronavirus hit.

 

Prices will be rock bottom until the world gets moving again, they'll creep back up to where they were a few months ago but only when the excess has been taken off the market.

That will take some time as things aren't gunna snap back overnight, don't forget the majority of the worlds airlines are currently inactive, massive consumers like that won't get back to full service quickly, some have already gone to the wall.

 

[Janus 28]

From BBC news site:

 

Motorists are being ripped off by petrol companies, the AA has claimed, as falling oil prices are not being reflected at the pump.

 

The motoring group calculates drivers are overcharged by more than £5 a tank.

 

"Questions will be asked about the fairness of pump prices during the great oil crash of 2020," the AA said.

https://www.bbc.co.uk/news/business-52387826

 

[geared 317]

Retailers are taking a bigger cut as profit to offset lower sales.

 

Also it probably depends how quickly they're selling stuff, if they fill their tanks and two days later the wholesale price falls they can't just start selling petrol cheaper, they've already bought in a load at one price and need to shift it before making a price change.

[Albert the Cat 0]

On 21/04/2020 at 22:26, Padders said:

Now down to 20 dollars Rudds, Forecasters say price at the pumps will fall to under £1 a litre.

Already has for about a week now.  Costco at 99.9p/l.