Petrol retailers defend high cost of fuel

Petrol and diesel retailers today defended rising prices at the pumps at a time when the cost of crude oil was falling.

Petrol and diesel retailers today defended rising prices at the pumps at a time when the cost of crude oil was falling.

They insisted they were not exploiting motorists, blaming the weak British pound against the US dollar for the situation.

Their comments follow a Shropshire Star investigation which revealed wildly fluctuating prices at the pumps. Unleaded fuel varied from £1.31 to £1.46 yesterday, while diesel ranged from £1.36 to nearly £1.50.

Some forecourts were close to their highest ever prices, despite a sustained fall in the cost of crude oil over the past four months.

Brian Madderson of RMI Petrol, which represents independent forecourts across the UK, said the fact that an average of 500 filling stations were closing each year showed there was little money to be made.

“If they were making substantial margins, we would see more investment coming into the business, rather than going out of it,” he said.

Although the price of crude oil had fallen, Mr Madderson pointed out that it was sold in US dollars, and with the British pound weakening against the dollar, the price was being pushed up.

“As a result we are not getting as much of the saving from crude oil prices as might be expected,” he added.

Most independent forecourts make between two and four pence profit on a litre of fuel – meaning a full tank only earns the petrol station between £1 and £2.

Mr Madderson said that was “hardly sustainable”, and explained petrol stations needed to add on extra revenue-earning services, such as shops, car washes or cash machines.

The cost of Brent crude oil has fallen by around 18 per cent since the start of April, but the cost of a litre of unleaded fuel has risen in that time by 1.8 per cent.

In addition to exchange rate troubles, the petrol industry said it was also being hit by rising delivery charges – ironically, largely due to the rising cost of fuel.

Shropshire’s supermarkets this week began their latest fuel price war, with Asda, Morrisons and Tesco cutting 1p or 2p off the price of a litre.

By Carl Jones

Comments for: "Petrol retailers defend high cost of fuel"

Ray Cope

Gas prices have fallen or remained steady

over the last year or so. What is the reason for the huge hike in our bills?

Colin.D.

Shareholders profits???

VICTOR PENNINGTON

What a load of rubbish! The pound against the dollar has not worsened of late. In fact it has improved since the American debt crisis. The petrol companies just do not get the message. They are greedy and just want to make as much money out of the motorist as possible. If companies like Asda did not reduce prices then goodness knows how much we would now be paying. It is about time better control/regualation of our energy companies was now undertaken.

Rodney Nosnail

What?

"Although the price of crude oil had fallen, Mr Madderson pointed out that it was sold in US dollars, and with the British pound weakening against the dollar, the price was being pushed up."

Er, no, Sterling has been strengthening against the Dollar. The weakest point was on 12th July at £1 to $1.588. Yesterday, after a general upward climb, the rate was £1 to $ 1.625. It has been higher in the intervening period and the trend remains upwards.

The justifications that Brian Madderson is giving would lead one to assume that the Dollar is some sort of super currency, strong against all others - it's not, it's a mess.

On 15th April, Brent Crude (as a benchmark) was at $124.04 a barrel and closed on 9th August at $103.63 spot London.

So - British currency up 2.3% against the Dollar and crude oil barrel spot price price down 17% since this year's high.

With spot down 17%, it would have needed Sterling to weaken agains the Dollar to £1 to $1.32 simply to keep the prices level in Sterling.

Anyone for nonsense? There's a lot of it about at the moment. They're taking us for suckers, government, retailers and industry.

I'd prefer it if they, (and the gas and electricity companies who are just as outrageous as the oil companies), would be honest and simply say "yes, our costs are going down but our prices are going to carry on going up because we want lots of profits and there's nothing you can do" rather than take us all for a bunch of grinning idiots.

The Original Jake

They need to maintain high prices at the pumps because their own costs remain sky high. The fuel bill for running the tanker fleets is astronomical.

Oh, hang on a minute...