Monday, Jan 18, 2016 at 12:39
Retail
fuel prices should be investigated by the ACCC - there's some devious behind-the-scenes manipulation going on to ensure motorists are paying far more than they should.
The average price of crude oil today is around US$30 a barrel. At its peak a few years ago, oil was US$110 a barrel.
The average profit per litre at
the servo has historically been 2c litre. It's currently 20c litre.
In
Perth, the wholesale price of ULP to servos is currently $1.02. Diesel is only $1.05 wholesale.
We should be seeing massive price drops in
fuel and big drops in costs of everything as
well, because
fuel is a substantial cost component of everything.
When I was an earthmoving contractor,
fuel made up between 25% and 30% of my business operating costs.
When we had the oil price surge in 1980/1981, diesel went from 10c litre to 40c litre in a period of 18 mths - and coupled with the worst drought in 80 yrs, the double whammy nearly broke me by the end of 1983.
Now we have the massive reverse in oil pricing, I haven't seen bowser
fuel prices drop to a quarter of what they were.
However, having said that - the problem the local refineries face, is owning high-cost and ancient refineries (Kwinana is the newest, and it was built in 1954!) and high local refining labour costs.
All the massive new refineries in Asia (Singapore in particular) can refine petrol and diesel at substantially less cost than local refineries - so that's where the local refiners are in a bind.
The oil companies could shut all the local refineries, and just import refined
fuel direct, and sell it for less, and make even bigger profits.
However, I suspect the Govt and the unions would go ballistic if that happened, as we would then have no refining capability in Australia, and be totally dependent on overseas refineries.
Regardless, there's room for the local oil companies to give us cheaper
fuel at present.
I suspect they are holding the prices up to near the level of massive profit they could make, on importing overseas
fuel on a bulk basis, with no local refining.
Cheers, Ron.
AnswerID:
595111
Follow Up By: JJ - Monday, Jan 18, 2016 at 15:33
Monday, Jan 18, 2016 at 15:33
Thanks for your explanation and breakdown on some of what goes on in the industry! Still makes one wonder how the current high prices and lows are come by and who controls it...def not by crude oil prices! It seems to be high for a week...slowly drops to a comfy low, then suddenly it sky rockets over night again! Oh
well, at least its still affordable!
JJ
FollowupID:
863736
Follow Up By: Baz - The Landy - Wednesday, Jan 20, 2016 at 09:14
Wednesday, Jan 20, 2016 at 09:14
The money that fuel retailers make, whether they are the local
servo business owner, or the corporate giants like BP and
Caltex, pails to insignificance when compared to the money that the government rakes in from every
tank of fuel you purchase.
The major retailers like
Caltex and BP are mere tax collection agents for the government…
Cheers, Baz – The Landy
FollowupID:
863836