It never ceases to amaze me how fuel bought at one price suddenly becomes more expensive after a significant event even before the tanks are replenished. Surely any government would find their popularity enhanced by passing a law that simply prohibits increasing sales prices on items bought before an event occurs where further purchases will be more expensive (maybe worded better).
I have always thought the same, but I’ve just heard a counter argument on the radio that has completely changed my view.
Oil is a commodity, in the same way that gold is. Ironically, oil is often referred to as black gold. Anyhow, if a bullion dealer buys an amount of gold at say £1,000 and gold prices go up by 30%, he’s not going to sell on that gold at £1,000 because that’s what he paid for it. He will sell it at £1,300 because that’s what it’s worth. Oil works the same way.
Of course, where that argument slightly falls down is when prices fall. A bullion dealer will never be able to sell the gold if he holds out for prices that applied before the price dropped, as customers will simply buy from another bullion dealer, so they all tend to work on the current market price. When petrol prices fall, some traders are very slow to adjust prices downwards, as they rely on the fact that most people are lazy and won’t shop around, but will use the garage that they are familiar with.
The governments fuel price checker is meant to help consumers to find cheap(er) fuel but, as is typical of anything that a government tries to implement, it’s not user friendly, hence why I stick with petrolprices.com
Of course, petrol retailers have considerable overheads (site costs, staff costs etc) and they make a very small margin on fuel in return for their efforts. Conversely, the government makes billions out of fuel duty and VAT in return for nothing, so it’s ironic that the the government is making the retailers out to be the bad guys, when they have far more tools at their disposal to ease the burden on the consumer.