Thursday, 6 September 2012

The Petrol Elephant

What does it take to be a good British citizen these days?

Well, it would seem from watching ITV news last night that it involves cheering on your local authority as it throws millions down the drain, being overwhelmed that your government spent £25bn of your taxes on two weeks of sports fun, but screaming blue murder if your local shop short-changes you by a quid.

How else can one explain the clip attached to this article?
After a long campaign the Office of Fair Trading has delighted some by asking for evidence to see if consumers are being ripped off by petrol companies. The main accusation, that when the wholesale price of oil falls, the drop is not fully passed on to punters at the pump.
We're being 'ripped off' apparently!

A cab driver adds "someone is making a lot of money" as Laura Kuenssberg declares that petrol has "nearly doubled" in recent years (hands up who can remember when fuel was 65p a litre).

Laura helpfully gives us this graphic (just ignore the mathematical fail for now).

Now, from that, who do you think is ripping us off? Petrol companies delaying passing on a few pence in reductions? Or do you reckon there's an entirely different entity causing it?

Our friendly cabbie is upset that fuel is cheaper all over the continent. Who does he think is responsible for the disparity? Companies which spend £billions in research, development, prospecting, distilling, and delivery of the product or - and this may be an off-the-wall view in our wibbly-wobbly modern bovine nation - could it be, perhaps, possibly, the 80 fucking pence on every single litre screwed from us by the government?

Complaining about oil companies fiddling with a few pence here and there is like being happy to be cracked over the head daily by a thug with lead piping, but running to the police because a market trader trod on your foot.

So the OFT is going to spend some of those tax resources on investigating petrol suppliers. Fantastic, I'll bet they're quivering in their cowboy boots; will quickly rush to knock a few pence off prices and the public sector will claim a wondrous success. Except that by the time the OFT reports back, Osborne will have already slapped another planned 3p on duty and harmed the country that little bit more.
Our findings suggest that a 2.5 pence reduction in fuel duty would result in the creation of 175 thousand jobs within a year and 180 thousand jobs within five years of such a reduction. Such a reduction, we estimate, would not result in any fiscal loss to the Government, while GDP would receive a boost of 0.32 per cent within a year and 0.34 per cent within five years.
The government screws motorists to the tune of £48bn per year yet ITV don't feel any of that merits a mention.

As elephants go, that's a mammoth of one running around garage forecourts that one of our major broadcasting companies didn't quite notice.

Good grief.


PeterA5145 said...

If government controlled retailers' prices and margins, do you think fuel would be, on average

(a) cheaper, or
(b) dearer?

WitteringsfromWitney said...

"hands up who can remember when fuel was 65p a litre"

Heck, some of us can remember when petrol was about 3/6d a gallon!

PeterA5145 said...

Petrol was last 65p per litre or less in 1999.

Captain Ranty said...

I am in the Oil & Gas bidness, and I have learnt a thing or two. (Not that you need to be, but I happen to know where the data is kept).

In UK waters it costs the oil majors between $12-14 a barrel to get the oil out of the ground. In West Africa, (thanks to less legislation, lower wage bills etc) it costs them between $2-4 per barrel. The sale price (of Brent Crude) is $113 per barrel and Light Sweet (from the Gulf of Mexico) is $95 per barrel. Now, those prices are for future supplies and those prices are what buyers will pay four weeks from today.

If some Nigerian warlord farts anywhere near a pipeline in the Niger Delta, the price will rocket. A day or two later when they realise that his gas had no effect on supply, the price will settle again. But the buyers are still paying that briefly inflated price. It's up and down like a bride's nightie most months as sabre-rattling in the ME continues. Even Hurricane Isaac had a detrimental effect.

The trouble is that the changes happen swiftly and there is no mechanism for the pumps to follow that wild up and down motion.

The only thing that is constant is, as you rightly point out......the tax take.

If those useless fucktards really wanted to stimulate the economy, all they need to do is reduce the tax by 10 or 20 or 50%.

But that, obviously, would be far too easy.

They are addicted to our cash. And we all think we should feed that addiction.

So, nothing will change.

Unless we get Chavez in charge. Venezuelans pay around 2p per litre. Even ole' Gadaffi knew how to keep his people sweet. They used to pay around 7p per litre. And his country didn't owe anyone a single dinar.

Go figure.


Jay said...

Hmm. Looking at that graphic, how dare retailers make 5p per litre off of us? This capitalism thing is outrageous. Where do I complain?

Dick_Puddlecote said...

I believe she said "recent years", WfW. ;)

Dick_Puddlecote said...

I wonder if last century still counts as "recent years".

Dick_Puddlecote said...

Interesting stuff. So it seems that there are multi-factors involved in the price charged by oil companies, which I'm sure the OFT will spend a lot of time and money investigating.

Meanwhile, the government will continue to sit on their fat backsides creaming the duty and VAT off others' endeavours with just the cost of collection to worry about.

Yes, I can see it now, petrol companies are the crooks! /sark

Dick_Puddlecote said...

I think the government should immediately add 5p on per litre to fund investigating such flagrant profiteering!

Sam Duncan said...

Let's not ignore the maths fail, because that makes the point as eloquently as anything else: the retail margin is simply a rounding error.

My mental arithmetic is only marginally better than ITV's, but on my reckoning, when you buy £20 worth of fuel, the retailer still doesn't quite make as much on that as the government does on every single liter*.

*You can force me to put up with these daft measurements, but you'll never make me speak French.

barnacle bill said...

Well finally Boy George & Cast Iron have finally figured out how to work the old smoke & mirrors machine the Buffty frae Kirkcaldy left behind in Downing Sreet.
Use the OFT investigation to divert the proles attention whilst increasing their pick pocketing taxes.
I would far rather see the OFT investigating the price differential of petrol to diesel. Now there they might be onto something?

A room with a view said...

Fuel ! a rip off! you must be joking
Actual cost of a PINT is 25p selling at 75p (PINT)
If you want a real eye watering rip off try beer and tobacco
Beer pint (actual)9-13p selling at £2.50 -£4
Loose tobacco "quoted" 23-28 p per 50 grammes in shop £15.00
So my dear beloved bleating ,moaning ,groaning ,whinging,suffering
hard done by gas guzzling chokers
smoker with a bus pass

Ravenscar. said...

How the hell do we compete with other nations?

Throw in the energy prices - think about it - government drops gas prices and 'invents' cheap energy ie: no green boondoggles and we could maybe start competing again.

Tony said...

I don't drive myself (haven't owned a car for years, too many knobs on the road these days) but I am wondering when people will stand up and say "enough is enough" with these crazy fuel prices.

It's a clear piss-take. We get ripped off here in the UK on pretty much everything but fuel stands out to me as the one that may (just may) be the straw that breaks the camels back. I'm not thinking suburban mum in the massive 4x4 taking the kiddies 2 miles to school, I am talking major transport companies and the like.

moonrakin said...

The newspapers aren't mass media anymore - broadcast media is where the propaganda effort goes. Fawning toadies doesn't quite cover it. Al Beeb used to do a European fuel price comparison table on Ceefax - that disappeared sometime during Blair's tenure when the grotesque lickspittles rushed out to paper over any evidence they thought would inflame the masses. If one applies the filter of wholesale disortion of this issue to the rest of the TV output - the picture that emerges is not a palatable one....

20% VAT ? would you voluntarily give 20% of the value of your work voluntarily to somebody who didn't contribute to the outcome?

Males the medieval church and tithes look quite benign.

c777 said...

Strange how government theft is now ingrained in the British psyche.
These "blinkers" have been well and truly worn for decades.

Henry Crun said...

Petrol is only marginally cheaper on the continent. Having worked in Netherlands earlier this year, unleaded was around the EUR1.73 - 1.76 mark on the forecourt and 1.78 (ish) on the motorways. In France (just back from hols) on the supermarket forecourts the cheapest I paid was EUR 1.59 and around 1.74 on the motorways. Only Luxembourg has subsidised fuel prices at around EUR 1.00 per litre. Diesel, on the other hand, is much cheaper on the continent.

ScottWichall said...

But they dont have the cost to worry about that, that is borne by the retailers and suppliers - the money just rolls on in.

Sam Duncan said...

Another thing: folks, it isn't just about family cars. Like the retail margin, they're only a tiny part of the real problem. Everything you buy has been transported from where it was made to where you bought it. All the raw materials were transported from where they were mined/grown/whatever to where the thing was made. The tranport industry's fuel bills (as Dick could no doubt tell you) would loosen your bowels. Remember, it was the haulage industry that almost brought the Blair government down in 2001.

Fuel tax is a tax on everything.

Furor Teutonicus said...

XX The trouble is that the changes happen swiftly and there is no mechanism for the pumps to follow that wild up and down motion.XX

They don't appear to have that problem when the prices go up in a budget. Within bloody SECONDS the forecourts are BANG "up to date". So if they can do it in one direction, they can do it in the other. And that was in the days BEFORE all they had to do was make a few clicks with a computer mouse to effect the change!