Petrol Price Differences

  ray7 15:55 30 Aug 07
Locked

I am trying to figure out a logical explanation for this.

Within a 2 mile radius of home there are 3 filling stations. Total and BP x2. Each charge 98.9p per lt for Unleaded.

At the outer perimeter of 5 miles, the filling stations include 3 Shell stations each charging 91.9
per litre.

7p per litre (£3.00 per tank) is a considerable difference. Apart from profiteering, anyone give a logical explanation.

Needless to say, I boycott the local and fill up when I,m in the vicinity of Shell

  GANDALF <|:-)> 16:02 30 Aug 07

market forces. We live in a free economy and you have the right to charge whatever you think that the market will stand. Personally i just fill up at any old petrol station and like beer, I never check the price.

G

  Clapton is God 16:03 30 Aug 07

"Apart from profiteering, anyone give a logical explanation"

Surely, you've answered your own question, haven't you?

Total and BP are taking a bigger profit margin. Simple as that. Stick with Shell.

  Stuartli 16:59 30 Aug 07

The big oil companies' profit margins on petrol are extremely small - it's the Government that creates the high cost per litre in tax and VAT (all without having any involvement in the acquisition, refining and distribution of the fuel).

On top of that the Government also gathers in taxes resulting from any profits made by the oil companies.

The oil companies make the bulk of their profits in other areas - fuel is a comparatively small division of the conglomerates.

If there was a reasonable profit in selling fuel do you think that so many petrol stations would have shops or other outlets or, even more drastic, close down because the return on the outlay doesn't encourage running the business?

All fuel outlets have to pay for fuel supplies (and hence ensure the Government receives the tax revenue ASAP) on delivery.

  techie4me 17:14 30 Aug 07

2 garages near me who are seperated only by a dual carriage way differ by 2p a litre.
If you interested in who is the cheapest click here
You have to sign up but they do show the cheapest near you!

  holme 17:31 30 Aug 07

Re. the link above, please beware major inaccuracies.

For our post code, and for the three nearest stations listed, two have got the wrong price against them (by 3 and 4p per litre); the third closed down last year... :-(

  DrScott 17:56 30 Aug 07

small differences are sometimes due to distance to the nearest refinery. Greewich (London) petrol used to be cheaper then many other boroughs because of ease of transport, and so lower tranpsort costs.

  techie4me 18:21 30 Aug 07

Used to be the case as their wwere a few Fuel Dumps in & around London.
Most fuel in the London area is taken out of the main distrubution areas off the Thames these days.
And some of the garages take less of a % to gain more customers.
Most gargages can make between 1.5p to 0.50p per litre sold, depends on area/demand etc.

  Pine Man 18:24 30 Aug 07

I used to work in a garage and we would sell petrol for virtually no profit just to get cars onto our forecourt and then, hopefully, into our workshops where the real money was made.

  ray7 18:35 30 Aug 07

I agree with everything you say but I question whether BP/Total are desperate enough to charge 7p more than garages no more than 4 miles away unless it is greedy profiteering.

Gandalph
I usually have the greatest respect for your observations on this site but must disagree with you on this occasion. It is not everybody who can afford to ignore prices and indeed could be one of the reasons companies can get away with profiteering. If people shopped around for more competitive prices, it could help the bring the profiteers into line

  GANDALF <|:-)> 18:51 30 Aug 07

'If people shopped around for more competitive prices, it could help the bring the profiteers into line'...let me throw caution to the wind and state that profits of 0.5 - 1.5p/litre do not seem to be excessive and 'profiteering' seems a tad strong. I'm sure that supermarkets make more than this on milk.

G

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