Cheaper fuel on the way.

Full Story HERE AA spokesman Luke Bosdet said: “The fall is excellent news, but it could take between a month and six weeks to feed to pump prices. Hold on a minute when the price goes up it goes up within 1 hour at the pumps but when the prices come down it takes a month to 6 weeks before we see it at the pumps?? There's something not right here????

[Tali]

Some ruthless petrol stations may implement a tax increase immediately following an announcement by the Chancellor, but not all.

I used to work in a supermarket garage and on the run up to the budget we would increase our wet stock (petrol and diesel) from around 2-3 days worth to keeping the tanks as full as possible. This meant that we could keep the price at the 'old' price for as long as possible.

If the price of the raw materials goes up then we would have to adjust the proces accordingly. Like wise if they went down.

Obviously, not all companies act like that and some will hike the price straight away, and keep prices high as long as possible when they drop to try and make a quick buck.

To the Retailers, there isn't actually that much profit in selling fuel. It's been a while since I worked in a garage, but most of the time fuel was seen as a loss leader and we would sell fuel at a lower price than that which we paid. I'm talking about the days when petrol was around the 50p-80p a litre mark.

[BBKing]

This is part of the reason:

India announced increases that, for example, would boost gasoline prices in New Delhi by 11 percent. Malaysia said it would hike gasoline prices by 41 percent and electricity for commercial and industrial users by 26 percent.

Indonesia and Taiwan, among others, have taken similar steps in recent weeks.

http://ap.google.com/article/ALeqM5i...BB-tAD913RA6O0

A lot of Asian countries had quite high fuel subsidies, which naturally increases demand. If their prices go up, demand reduces and the oil price should reduce (it already has, quite a bit). A mate in the oil industry reckons that something odd has happened, since there's not really an actual shortage*, certainly not at $100/barrel+.

Another thing is that the pound has fallen against the dollar, which will tend to reduce the effect of the fall in oil price. It cushioned us when the dollar was dropping, of course, so it's swings and roundabouts.

A weakening dollar can spur investors to buy oil and other commodities as a hedge against inflation, but the effect tends to reverse when the dollar strengthens. A stronger dollar also makes oil more expensive to buyers dealing in other currencies.

* Of course, there's a shortage if you're only prepared to pay $50 a barrel...

[brundles]

Originally Posted by BBKing

A mate in the oil industry reckons that something odd has happened, since there's not really an actual shortage*, certainly not at $100/barrel+.

Is that the Oil futures investigation you're talking about? The idea that people who have agreed to pay a certain price for oil in the future are essentially scaremongering and manipulating the market in order to keep the market price higher thus guaranteeing them a profit.

It wont be as cheap as what it cost in Greenland though. £0.39p pl, and yet they still complain! Link

[Osem]

Originally Posted by brundles

Is that the Oil futures investigation you're talking about? The idea that people who have agreed to pay a certain price for oil in the future are essentially scaremongering and manipulating the market in order to keep the market price higher thus guaranteeing them a profit.

In just the same was as people jumped on the housing bandwagon to make money and in so doing forced prices up by increasing demand, buying commodities futures can be undertaken purely as a speculative venture and is common when demand is perceived to be on the move. The difference is that with futures trading there is often no intention of ever actually taking ownership of the product concerned just the expectation that those 'options to buy' will themselves increase in value and be able to be sold for a profit at some future point. It's just a form of gambling but many companies also engage in this activitiy as a means by which to try to insulate themselves from the effects of price increases.

I reckon futures trading has been having a significant effect on oil and other commodities prices for some time but there may be light at the end of the tunnel as economies slow and overall demand declines.

http://www.blurtit.com/q116854.html

[BBKing]

Is that the Oil futures investigation you're talking about?

Not quite, my mate works in exploration, so he has a fair idea what's being discovered where (frequent trips to Tanzania, for instance). He's laughing though, he's in a job for life, they'll still be discovering stuff in 50 years. He's had about five pay rises lately, too.

What they won't be discovering is the good stuff that's easy to dig up, but that doesn't worry him.

What'll probably happen is that Darling and co. will cave in, there'll be another big hole in the public finances and then the price of petrol will drop 10 or 15p and we'll all wonder what the fuss was about. Meanwhile, somebody somewhere will be sending off for yacht catalogues.

[ntluser]

This is about governments and oil companies deliberately restricting the availability of oil so that the price goes up and the oil companies can have their profits and governments can have their tax revenues at at the expense of the consumers.

Maybe consumers ought to restrict the availability of their votes to governments and look for alternative methods of tranportation that use less or no oil.

Hopefully, both governments and oil companies will get the message that we are not willing to be ripped off.

[BBKing]

governments can have their tax revenues at at the expense of the consumers.

Eh? Why is having a weed off electorate who are now going to vote for the other lot in droves in the government's interest? I think you overestimate how much power government actually has these days.

look for alternative methods of tranportation that use less or no oil.

DfT policy for railways was until not too long ago decided on the basis of an oil price of $25 a barrel. They don't actually want to consider what happens when oil is too expensive for transportation.

Interestingly, my mate mentioned above voted Green for the London Mayor. He said it was to offset what he does for a living...

[ntluser]

Originally Posted by BBKing

Eh? Why is having a weed off electorate who are now going to vote for the other lot in droves in the government's interest? I think you overestimate how much power government actually has these days.

They have the power to tax you. You have the power to refuse to pay. They have the power to jail you. Is that overestimating too much?

It's true that they can't jail everybody but it's unfortunate if you happen to be one who does end up in jail cell. Remember this is the government that jailed pensioners for non-payment of council tax.

Also remember that there's no guarantee that the Conservatives will do any better as the only way to do something is for the government to reduce the existing tax on fuel which has a knock-on effect on government expenditure and policy implementation. I doubt if either party wants to do that and no-one is suggesting it so it seems unlikely.

DfT policy for railways was until not too long ago decided on the basis of an oil price of $25 a barrel. They don't actually want to consider what happens when oil is too expensive for transportation.

Interestingly, my mate mentioned above voted Green for the London Mayor. He said it was to offset what he does for a living...

We live in an oil-based economy. Oil is only highly priced if there is low supply and high demand. Take the demand away and oil companies have the oil but few buyers.

Despite the protests, most people will reluctantly pay the increased price. Biker protests only work if you have fuel for your motorbike.

Originally Posted by BBKing

Not quite, my mate works in exploration, so he has a fair idea what's being discovered where (frequent trips to Tanzania, for instance). He's laughing though, he's in a job for life, they'll still be discovering stuff in 50 years. He's had about five pay rises lately, too.

What they won't be discovering is the good stuff that's easy to dig up, but that doesn't worry him.

What'll probably happen is that Darling and co. will cave in, there'll be another big hole in the public finances and then the price of petrol will drop 10 or 15p and we'll all wonder what the fuss was about. Meanwhile, somebody somewhere will be sending off for yacht catalogues.

Your bang on the button there mate, BP's reserves are 13 trillion barrels of oil untouched waiting to be bought to the surface that's without the other oil companies and their reserves, 13 trillion barrels is enough for 50 years of use, add all the other oil companies reserves up and you've got alot of oil for many years to come. There's no reason for it to be this high in price.

[ntluser]

Originally Posted by Nidge

Your bang on the button there mate, BP's reserves are 13 trillion barrels of oil untouched waiting to be bought to the surface that's without the other oil companies and their reserves, 13 trillion barrels is enough for 50 years of use, add all the other oil companies reserves up and you've got alot of oil for many years to come. There's no reason for it to be this high in price.

There's no doubt that there is plenty of oil somewhere in the world. All I am saying is that it is in the interests of oil companies and governments to keep the price of oil artificially high by simply limiting supply.

The only reason it is so high is profit but they will always quote the exploration and development costs as a reason for the high prices despite probably having large stores of oil ready for market.

[slowcoach]

Originally Posted by Nidge

Full Story HERE AA spokesman Luke Bosdet said: “The fall is excellent news, but it could take between a month and six weeks to feed to pump prices. Hold on a minute when the price goes up it goes up within 1 hour at the pumps but when the prices come down it takes a month to 6 weeks before we see it at the pumps?? There's something not right here????

24 hours is a long time in politics, and oil price speculation.

http://news.bbc.co.uk/1/hi/business/7440536.stm

I notice in the paper today that Diesel is at it's lowest price for years, the papers said that a tonne of diesel was £100, cheaper than it was 5 years ago.

[Wicked_and_Crazy]

Originally Posted by Nidge

I notice in the paper today that Diesel is at it's lowest price for years, the papers said that a tonne of diesel was £100, cheaper than it was 5 years ago.

what paper was that?