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AA calls OFT report on Petrol Pricing "a whitwash"


SillBill

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I tend to agree with the AA on this, when the government rakes in 60% of the price in Duty and VAT, what is there left to play around with? Although the Oil companies are not squeaky clean either, falling crude prices don't make their way to the pumps as fast as when crude prices go up.

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Aitchbee

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I heard that the OFT are recommending [to the government] that service stations / stops on motorways should put up signs displaying their prices [of petrol], so as to help drivers save money ie. 'shop around' for the lowest price-per-litre. That doesn't sound like a good GREEN policy, to me.

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SillBill

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That is a really sensible suggestion from OFT on a par with its finding that all's well in rip off Britain. What does the motorist do on the Motorway when he sees the cost of a Liter displayed at the entrance to the MWay Service station? does he A) leave the Motorway at the next available Exit and hope that he'll find a garage with cheaper fuel (before he runs out) or B) continue to the next Services, maybe 50 miles or so on an almost empty tank only to find that it's dearer than the one he left 50 miles back?

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Aitchbee

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...If you've got an up-to-date TOM TOM, then that should not be an issue ;o}

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SillBill

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...and just hope that the TOM TOM doesn't send you into a nearby river.

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Forum Editor

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It's all very well people saying they have a 'perception'that they are being 'ripped off', what they don't say is what they base their perception on. half the time it seems to me that it's simply a reaction against the selling price - "I don't like paying these prices, so I'll say I'm being ripped off,despite the fact that I don't have a clue about the market factors involved."

The OFT report seems to be saying that the blame for higher pump prices should be aimed at the government, because a hefty slice of the selling price of a litre of petrol is tax.

Over half the cost of petrol at the pumps is tax, something that the oil companies have no control over. A third is the actual petrol, including its production costs, and something between 1% and 4% goes to the retailer.

The production cost - the actual refining process - is pretty efficient, and cost-effective, it represents a very small percentage of the total.

The big money as far as the oil companies are concerned goes in finding the crude oil in the first place, and then getting it out of the earth's crust and into the refinery. Oil company exploration costs are enormous - approaching $300 billion by 2015, and they'll continue to rise as oil deposits become harder to find and exploit.

In 1998 you could buy a barrel of crude for around $12; the same barrel today would cost around $112.

A rip off? That's a matter of opinion, but one thing's for sure - the price of petrol will inexorably rise in the medium to long term, and there's nothing that anyone can do to stop it happening.

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Quickbeam

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"It's all very well people saying they have a 'perception'that they are being 'ripped off', what they don't say is what they base their perception on"

It's the 60% tax gives me the most perception FE.

If bread was taxed at 60% I'd feel ripped of in the bakers shop...

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Forum Editor

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Quickbeam

Right, so in your book it's the government doing the ripping off, then. Most people seem to have the idea that it's the big, bad oil companies.

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spuds

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Fortunately I travel past many of the major supermarket filling stations within a short distance from my home, and by doing so check all the latest 'bargain' prices. Never seems to work though, this bargain thing, because when one puts it up or down, the others shortly follow.

Its only the independents that seem to battle or weather the storm, so to say?.

But having said that, one of our local for many years family run garage and fuel business as sold out, and the new owners and refurbishment as provided a Londis store, possibly more reliant on food sales than petrol sales?.

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Chronos the 2nd

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Most people seem to have the idea that it's the big, bad oil companies.

Of course not, we all know that big companies have our best interests at heart and are struggling to make a profit these days. You only need to watch the current crop of ads for the high street banks to see that they really are looking after our interests these days.

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morddwyd

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The AA depends for its very existence on motorists.

It's hardly likely to come out and say "All of our customers are a bunch of whining skiinflints, and this report proves it"!

Take off the tax and petrol prices here are among the cheapest in Europe.

It's not the big bad oil companies but our caring, sharing "we're all in this together (I need my ministerial car for 9.00)" government.

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