I see that the price of oil is falling today and is currently at a 2 month low. So, presumably petrol prices will follow suit and start to come down pretty quickly. Yeah right.
Seriously though: how much do oil prices have to fall before petrol does start to come down in price. The oil companies always claim they try to absorb increases in the cost of oil and only increase the price of fuel reluctantly. Given that petrol has gone up markedly recently, surely a fall in the oil price should mean a fairly rapid reduction in petrol costs?
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That's the May price, if it holds, but I do hope prices fall, like everyone else.
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Oil prices have been gradually increasing for the past year and a half or so, from about $19 a barrel in November 01 to $32 a barrel in mid February 03, but over that period road fuel prices at the pump in the UK haven't really reflected this - it's only in the last month or two that prices have been increasing more inexorably. In spite of today's drop in the price of crude, it could well increase again later this week once the war starts. However, the price of crude seems to have a more immediate effect on the cost of home heating oil, so I'd say now would be a good time to order a top-up on your domestic tank.
Just for comparison - over the same period (November 01 - today), biodiesel prices for me have been like this:
1/11/01 - 75p a litre
1/11/02 - 75p a litre
Today - yep, 75p a litre
I admit that there are wider variations around the country in the price of biodiesel than there are in mineral fuels - anything from 58p a litre in Co. Tyrone to 85p a litre in Derby - but in future, it could actually get cheaper again, especially if the campaign for bringing duty to the levels of LPG succeeds.
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I think you'll find the different price sensitivity between petrol and home heating is due to tax. Although the price of crude might rise a lot, it only represents a VERY small proportion of the pump price of petrol as fuel duty then VAT are added. However, heating fuel is (I believe) subject to much lower tax therefore the raw material forms a much higher proportion of the pump price, and therefore will be more volatile when crude prices change.
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Yep, that's about the height of it. In fact, isn't home heating oil only* taxed at VAT of 8%? Or am I forgetting about another tax on top of that?
Actually, it's just occurred to me that a similar level of volatility must affect the agricultural sector, where "red" diesel only costs 35 or so pence per litre due to reduced tac levels.
* - Note ironic use of the word "only".
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I know two people who use red marine diesel exclusively in their cars...unlikely to get caught I guess, probably piffling penalties if they do...
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Uh-oh. Smokie, tell your mates that HMC&E have the right to stop you and dip your tank without a search warrant to check for this, first fine is usually £750 and they can confiscate your vehicle as well - even for the first offence. And you can be taken to court, prosecuted and end up with a criminal record. Not really worth it!
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I know that, they know that too - but they regard the chances of it happening as very low...
Unless someone shops them of course!
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Smokie, tell them to stay away from any agricultural or county shows as HMC&E have a nasty habit of setting up roadblocks near these to dip any diesel cars that catches their eye. They caught loads at the Great Dorset Steam Fair a couple of years back.
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I'm hoping, Smokie, that your friends' cars aren't blatantly obvious working vehicles? (Like mine!) I get pulled in and "dipped" about twice a year, on the grounds that I'd have more to gain than the average motorist because of the mileage I cover.
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Isn't one of the penalties that your vehicle can be confiscated?
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I think the guys are fully aware of the risks they run but save soooo much that they are prepared to take those risks. Neither are "working" cars, but they both do high mileages with their jobs.
Nevertheless, I will pass on these warnings...
I have to say, I don't like them doing it as it means I pay more as a result!
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