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11 comments on UK Petrol Prices

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haggisbasher on May 4, 2006 - 4:12am Permalink | Subthread | Parent | Comments top
Hi Chris,

I get more or less the same numbers using the same relationship in product price rise v oil price rise as occurred between Oct 03 and April 06.  
However there is a disproportionality between the oil price rise and the product price rise.  Between 03 and 06 the oil price increased by a factor of 2.31, but the product price increased only by a factor of 1.51.  I would assume that is due to the other costs of refining and delivery only rising by the normal amount of inflation.  As the oil price continues to increase by a greater amount than the other costs, it will have a more direct effect on the price of the delivered product.
In the worst case, if the product price maintained the same relationship to oil price when the oil price reaches $200 as in Apr 06, product price would reach 95.24p, and pump price 167.25.  

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biffvernon on May 4, 2006 - 6:32am Permalink | Subthread | Parent | Comments top
Within the product price there are other taxes.  Royalty was abolished in 2003 but Petroleum Revenue Tax is still levied on the, albeit declining, share of older North Sea fields, Corporation Tax is applied to oil company profits wherever they get their oil and the companies also pay National Insurance on domestic wages and Business Rates on domestic premises, and other taxes are levied by the various producer nation governments.  All of these must ultimately be covered by the product price.

It's interesting, perhaps sobering, to see so clearly spelled out, Chris, that when the price of crude doubles I won't actually need to alter my driving habits very much.  The price of domestic heating and electricity is, I suppose, much more sensitive.

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max the gasman on May 9, 2006 - 2:45pm Permalink | Subthread | Parent | Comments top
"It's interesting, perhaps sobering, to see so clearly spelled out, Chris, that when the price of crude doubles I won't actually need to alter my driving habits very much.  The price of domestic heating and electricity is, I suppose, much more sensitive. "

The cost of fuel before tax includes many oil and energy intensive processes i.e. transport costs, and all the infrastructure of oil production from bit to car fuel tank, plus making the cars, and maintaining roads.  These costs of motoring will all rise too.  These cost rises will curtail car use.  The rising cost of steel has yet to feed into retail car prices, but it must do soon.

Farming and fishing have no fuel tax either.

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