Petrol prices

[wireliner]

The price of ULP in Adelaide currently is $1.35 a litre. The price of oil is $51. What gives??? Will I pay $2+ a litre when oil kicks in again?

[doug3030]

What gives???

I follow the petrol prices here https://www.accc.gov.au/consumers/petrol-diesel-lpg/petrol-price-cycles#petrol-price-cycles-in-capital-cities

There are buying tips on the site to help you buy petrol when it is its cheapest and tells you when to avoid buying if you can.

I am currently on the road, have been since the end of March and check the prices where I am and where I am going on the above link or here https://motormouth.com.au/countryprices.aspx.

I have a 129 litre long range tank on the Rodeo and I carry four x 20 ltr jerrycans so the savings from buying up to 200 ltr at a cheap price then using it when the price goes up can be considerable. The way I see it my jerrycans are paying for themselves again on this trip alone.

I know this does not fully answer Wireliner's question, but it may help others minimisetheir fuel costs by utilising the above links.

CHeers

Doug

[BobL]

The link between the media quoted price of crude oil and petrol prices is not as close as folks think.

For a start the price of crude oil quoted in the media is what is called the "spot price" i.e. if you want to buy Western Texas Crude oil today.
This is rarely what the refineries paid for the crude oil in their tanks, or the prices they will pay next week or next year.
Refineries have to establish a regular supply chain and could not exist if they operated on the spot market.
This is why the supply and demand of petrol has it's own cycle and significantly influenced by something called futures.

If you have some spare time and like reading about economics try this link and the links therein
http://www.investopedia.com/articles/economics/08/crude-and-gas-prices.asp
They don't provide a simple clear answer because there is no simple clear answer.

Ultimately the buck stops with the consumer and a lone consumer can do nothing to affect prices but as a group the more people buy less petrol the lower the price.
If we all purchased lower consumption cars, use public transport, walk or ride more bikes, or buy electric cars this will definitely have an impact

[Evanism]

The link between the media quoted price of crude oil and petrol prices is not as close as folks think.

For a start the price of crude oil quoted in the media is what is called the "spot price" i.e. if you want to buy Western Texas Crude oil today.
This is rarely what the refineries paid for the crude oil in their tanks, or the prices they will pay next week or next year.
Refineries have to establish a regular supply chain and could not exist if they operated on the spot market.
This is why the supply and demand of petrol has it's own cycle and significantly influenced by something called futures.

If you have some spare time and like reading about economics try this link and the links therein
http://www.investopedia.com/articles/economics/08/crude-and-gas-prices.asp
They don't provide a simple clear answer because there is no simple clear answer.

Ultimately the buck stops with the consumer and a lone consumer can do nothing to affect prices but as a group the more people buy less petrol the lower the price.
If we all purchased lower consumption cars, use public transport, walk or ride more bikes, or buy electric cars this will definitely have an impact

Here are the headline futures: http://finviz.com/futures.ashx

Oil is about to tumble, hard. Storage world wide is packed full, production is sky high, supertankers are lined up 50 miles deep, Baltic shipping rate is the lowest in history, miles of driving has fallen off a cliff, and the northern hemi is beginning the warm.

Average US price today is AUD$0.846 a litre.

Conspiracy? No. Competitive? Hahahaha! Cartel? Absolutely.

[BamBam53]

I live in a small city on the west coast of the north island in New Zealand. In town I can buy 91 for $1.679 per litre. 40 kilometres down the highway 91 is $1929 per litre.

The difference is because in town we have an independent called Gull operating providing competition. Down the highway you only have the big oil companys 'competing'.

It happens where ever Gull has set up and is called the 'Gull' effect

[Bushmiller]

I think the apparent failure of petrol to follow the price of crude is similar to the cost of meat in the shops.

Let me explain: When there is a drought, the farmer may receive a reduced cost for his animals. Let's keep the sums simple. Normally he "enjoys" $3.00/Kg but during a drought he only gets $2.00/Kg (we are talking top quality ready for market animals not skin and bones cracker cows).

Cost of beef in the shops may average $20/Kg in normal times, but even if the drought cost is passed on to the consumer it would only result in the price coming down to $19/Kg. In other words the costs relating to the intermediaries and overheads is a constant.

I think something similar applies to petrol prices, although I would be the last person to defend them. However, like bank interest rates, it does seem that the oil companies are very quick to attribute rising retail costs to the high price of crude (remember when it exceeded $100 per barrel for the first time).

I also take on board Evanism's comments on cabals and collusion. It seems to have been the focus of the ACCC in recent times not that they have been able to make anything stick.

Regards
Paul