fantasycouriers
We finally see a supermarket war has broken out, and the result is lower petrol pump prices, finally back below that £1 a litre mark.
The thing is, the price of a barrel of oil has fallen form $150 to $80 but we’re still only slowly seeing 1p – 3p reductions working their way through to the pumps. It’s also very interesting to note that it’s not the oil companies launching the price cuts, but instead the supermarkets, shaming the oil companies into following suit.
It has been said that it can take up to 6 weeks for a reduction in a barrel of crude to work it’s way through to the petrol pump price. However, increases in the price of crude seem to have an immediate, sameday, increase in our fuel bills.
Do we have a case of the oil companies wanting to have it both ways? Or is there any underlying commercial reason that the price cuts have been so slow to work their way through to the consumers. Some my cite the financial crises, unstable markets, fuel companies being reluctant to pass on cuts incase the next week they need to increase the prices again, and all the bad PR that would bring with it.
Or is it simply the case that the fuel companies will charge what the markets will bear, and that during the last few weeks consumers, the media and everyone else has taken their eyes off the price of fuel, and have been watching the FTSE instead, and so the oil companies have simply sat quietly by and taken advantage of a couple of weeks of higher margins.
If this is the case, is it wrong? Are we right to expect the oil companies to pass on the reduction in the price of crude, after all they are all commercial companies there to make a profit. They know that there are lean times coming and that now is not a time for a low margin/loss making price war. After all, many of the banks failed to pass on the government’s required 1/2 % interest rate cut onto new borrowers, choosing instead to keep it and use that to give themselves a bit of a cushion and to make a bit of a profit to cover those great big losses.
The price cut does however co-incide with the Prime Minsters’s call last week for the oil companies to cut the price of fuel. It seems that someone is still keeping a close eye on them.
Fantasy Couriers 