We diesel car owners are being ripped off by the oil companies. I have kept records of how the diesel price per litre is made up and it is clear that the oil companies are taking 3-4p more per litre than historically. It is not the retailers who are taking the money - their margins are pretty low (but then again lots of forecourts are owned by the oil companies anyway). It's in the wholesale price so even the supermarkets can't do anything. It has been usual for the price of diesel to go up in the autumn by up to 4p more than unleaded (blamed on the winter demand for heating oil which is very similar to diesel) but then to go down again in the spring or early summer. This year the oil companies have made the differential stick throughout the year. The excise duty on diesel by the way is the same as unleaded at 45.8p per litre. VAT is levied at 17.5% on the retail price including the duty (not a fair application of Value-Added, either but Customs and Excise wouldn't agree, I am sure). So if you wonder why the oil companies are making such huge profits in the UK, now you know - 4p per litre of diesel sold goes straight into their profits.
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Would be very interesting to know how many 4 pennies per litre of fuel go to each of the fuel companies operating in the UK. Probably not that great a proportion of the profit.
I am very happy for the oil companies to make a profit. It is the only long-term method known to afford to discover, tap and process more of the correct oil for our use.
No profit = no money for development = scarce diesel = even higher price.
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IIRC when crude oil is cracked a greater proportion of petrol than diesel is produced, hence as diesel demand increases relative to petrol it's price is likely to rise.
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Also remember the equivelant amount in volume of diesel weighs 20%more than petrol.So as far as real ecomny is concerned diesel is no more effient than petrol,as we buy most things by weight including wholesale fuel, then the difference disappears.The problem we have is that there is not the refining capacity for all the gas oil that is required and it takes around five years to fetch a new one on stream that with wars and hurracanes and increased eastern demand the wholesale price will carry on rising aat an alarming rate until it triggers a recession.Future rates on petrol at the moment predict £1.80 per litre of petrol in 12 months at the present rate of increase in the UK.Not a happy thought.
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I can't see £1.80 a litre happening. Country would literally grind to a halt. Government would be forced to intervene by reducing the tax.
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Agree with Red Baron
Oil companies exist to make a profit for their shareholders, not to provide a service to the general public. If you think they are making too much profit, become a shareholder.
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>>Oil companies exist to make a profit for their shareholders, >>
It's completely mixed up nonsense like that which makes it difficult to believe you are being serious.
What's more those profits that you casually donate to shareholders more likely than not help pay for your pension or those of others in your family; big pension companies hold such blue chip shares to ensure that those whose working life is over have a reasonable pension.
The taxes on those profits also help you and millions of others. They play a big role in maintaining roads, hospitals, police, fire, ambulance and other services.
I could go on but you'll get the drift, except to point out that BP recently revealed it had LOST £186m marketing and retailing petrol in the UK over the previous financial year.
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What\'s for you won\'t pass you by
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I don't just agree with Red Baron. I agree with Stuartli as well. Can't quite understand what he considers to be mixed up nonsense, though.
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IIRC when crude oil is cracked a greater proportion of petrol than diesel is produced, hence as diesel demand increases relative to petrol it's price is likely to rise.
This is not entirely true :-
When crude oil is refined, a far higher percentage of diesel type fuels are produced than light otanes, naptha, avaition gasoline etc.
In fact 15-20 or so years ago, a lot of the oil companies built huge and expensive cat-cracker platnt who purpose was to catalytically reform heavy fuel oils back into more desirable and expensive petrol/avgas etc.
Now it seems that global demand for diesel is getting towards making many of these plants redundant or under-used.
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World refining facilities aren't set up for the current demographic we have. The uptake of diesel was never expected to be so extreme in the passenger car market. Now with almost half of all cars in Europe sold being diesel not petrol, and the increased number of products moved around the world prices must go up.
Professional Engineer this edition (Volume 18, Number 15, Page 7) carries an article covering the shortage of Diesel in Europe. Estimates show we could be as much as 50 million tonnes of Diesel short per year by 2015, in particular once heating oil and non road fuel is brought environmentally into line with road fuel in terms of sulphur content etc.
The £1 barrier is largely psychological in effect, but the effect is plain to see...
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"So if you wonder why the oil companies are making such huge profits in the UK, now you know - 4p per litre of diesel sold goes straight into their profits"
I'm sorry but this is TOTAL economic illiteracy. Perhaps relevant to readers of the Daily Sport?
Most of the profit on fuel is made upstream: ie. eploration and production of oil from reserves. Historically profits from refining have been poor. Hence the lack of investment in refining in the UK and US - which is why in US petrol prices are rising very rapidly.
madf
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The excise duty on diesel by the way is thesame as unleaded at 45.8p per litre. VAT is levied at 17.5% on the retail price including the duty (not a fair application of Value-Added, either but Customs and Excise wouldn't agree, I am sure). So if you wonder why the oil companies are making such huge profits in the UK, now you know - 4p per litre of diesel sold goes straight into their profits.
I think that you are wrong. Diesel duty rates as far as I know are 48.32p a litre. I think that this explains your 3-4p going straight to the oil companies and therefore your argument is baseless.
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Also I am sure that if your income tax doubled and the fuel duty was dropped, you wouldn't be happy with that.
HMG has to get money from somewhere otherwise there will be nothing to support the police, hospitals, the army etc etc. Personally I am OK with high fuel duties if other taxes are not bumped up as well. As many new taxes are coming in along with increased fuel/alcohol/tobacco duties, I think that is what causes resentment (well it does in me anyway).
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The commodity market for oil and gas has pushed up gas and electric prices by far more in percentage terms than fuel for transport.
I don't think LPG has gone up by that much.
Around where I commute, where once there was a price difference between petrol and diesel of 5p, this has narrowed to 1p at some stations. Petrol heads will feel this more than diesel nuts.
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In every other country I can think of, diesel is much cheaper than petrol, and the gap is much larger than it has ever been here.
On the continant, diesel sales have outripped petrols for decaded, yet diesel is 2/3rds the price of petrol in many of those countries.
So here we are, a small island in the corner of Europe, and when a few more people buy diesels, suddenly there is not enough and the price skyrockets. It's a sham, a scam and a rip-off that could only ocurr in the UK.
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