Why aren't petrol prices much higher?

linlithgowoil

Well, petrol (gas to you yanks) is about 85 pence a litre now and diesel is around 92 pence a litre. This is with $60 oil. When oil was $30 a barrel early last year, petrol prices were around 77 pence a litre i recall. So thats only an 8 pence increase with a doubling of oil prices.

So, if oil was suddenly $240 a barrel, petrol would be about 105 pence per litre. That is nothing when you think about it - given that many experts believe that oil peaking is simply a transportation fuels crisis.

So - if petrol is about $2.20 in the US with $60 oil, it will likely be no more than $3 with $200 a barrel oil. For $5 petrol ,you'd likely need $500 a barrel oil or more.

JoeW · Posted: Mon Jun 27, 2005 8:58 am Post subject:

i don't think your math adds up. what we have right now in the US is:
$60/barrel = $1.43/gallon crude [assume that 1 gallon crude makes 1 gallon of refined product]
$2.20 gasoline = $1.43 (for the oil input) + $.77 for tax, refining, delivery, and profit.
Where I live, the tax is about $.43.

If crude doubles to $120/bbl, then the oil input is $2.86 and I would expect the retail price of a gallon of gasoline to be $2.86 + $.77 = $3.63.

The $200/barrel scenario should put gasoline around $5.50/gal in the US.

cammo2004 · Heavy Crude Joined: Dec 09, 2004 Posts: 104

Wildwell · Fission Joined: Feb 03, 2005 Posts: 2080 Location: UK

linlithgowoil · Posted: Mon Jun 27, 2005 9:54 am Post subject:

cammo2004 · Heavy Crude Joined: Dec 09, 2004 Posts: 104

Durban · Posted: Mon Jun 27, 2005 10:43 am Post subject:

I was wondering.... Here in The Netherlands we pay (Euro converted to US$): USD 6.58 per gallon. Most of this money goes directly to the government. Still...business as usual and nobody even mentions the high gas prices. Would it be possible that US citizens eventually accept these kind of prices too and somehow continue their lifes?

Z · Posted: Mon Jun 27, 2005 11:03 am Post subject:

Wildwell · Fission Joined: Feb 03, 2005 Posts: 2080 Location: UK

UK

Fuel duty is 48.32p

Base product 27p

Retailers cut 4p

Plus VAT at 17.5%

$120 barrel would mean 27p rise to 117p per litre aprox.

The difference between $50 and $60 is 4.5p aprox

The average family car would cost another £2.70 to fill up, or 0.67p a mile. 5 x 40 mile commute would cost an extra £1.34 per week with $10 difference or £13.40 with $100 difference.

These are my researched calculations.

It appears many governments have been dropping duty in order to calm prices at the pump, another reason demand is not falling away very quickly. For those with no tax buffer or Airlines it's very bad news.

Permanently_Baffled · Posted: Mon Jun 27, 2005 12:05 pm Post subject:

Your calculations are spot on Wildwell , every increase in oil price of $50 increases petrol by roughly 22 pence.
_________________
Peak Oil? crap Happens !

Wildwell · Fission Joined: Feb 03, 2005 Posts: 2080 Location: UK

I reckon people will keep paying that for a bit yet, the average tax home pay per week is around the £452 mark before tax.

Mind you time oil gets to $150, the effects on poor countries, airlines and trucking would be massive.

$10 rise for British Airways means £250 million extra costs.

$100 rise would mean £2.5 billion extra costs.

Permanently_Baffled · Posted: Mon Jun 27, 2005 1:00 pm Post subject:

You mention the airlines, when is the new terminal at Gatwick due to open? Is it 2008?

We could see the terminal open but with no traffic to go through it! LOL what a waste of money!

PB
_________________
Peak Oil? crap Happens !

Sys1 · Intermediate Crude Joined: Feb 25, 2005 Posts: 653

Perhabs taxes on oil are reduced while barrel going up to smooth the transition at pump...

Wildwell · Fission Joined: Feb 03, 2005 Posts: 2080 Location: UK

LOL As you know I'm not as negative as most here. The airlines are going to be around for a bit yet; some of them are excellently positioned. When they are doing the things only they can do in any sensible manner (say London - India, Cuba, US) they can be a very successful business, right up until quite silly prices, albeit at a lower scale operation. But what's going on now, with cheap flights for £20 to Europe and some of the silly internal flights we have is just not sustainable in the medium to long term - it's just not ecologically sound for a start, let in line on the oil demand side.

Even the airlines admit this is not the sort of business they should be in, especially judging by the comments of the outgoing BA boss.

The likes of Michael O'Leary is a very hard nose businessman who has really stripped the airline business right back to almost running a bus service in the air.

http://www.guardian.co.uk/airlines/story/0,1371,1513378,00.html

But the squeeze has already bugun and even Ryanair is feeling the pinch.

http://news.airwise.com/story/view/1119360497.html

O'leary says '"I am not a cloud bunny, I am not an aerosexual. I don't like aeroplanes'. While he can make money he'll be in the business. As soon as there is no money to be made, he'll Fark off overnight.

oiless · Posted: Mon Jun 27, 2005 9:36 pm Post subject:

80.9 Canadian a litre was what I paid today. $3.06(Can) a US gallon, or $2.52 US at today's exchange rate. Price varies as much as 15-20 cents a litre from one place to the next, a distance of only a few miles. (80.9 was the lowest I saw, 95.9 the highest) Prices have been dropping for about a week now.
25.5 cents a litre is provincial/federal gas taxes I believe, plus there is a further 6 cents a litre if you fill up within the Greater Vancouver Regional District. Then of course there is 7% Goods and Services tax on that total. (tax on tax)