Can someone advise me on the facts about Diesel costs

[nedflanders]

Why is diesel still sitting about 106p per litre when Brent Crude is under $49 a barrel. Can anyone tell me what price diesel was last year when oil was $49? Have the government increased duty or tax on diesel in the last year or are the petrol companies taking us for mugs?

[jake-the-peg]

Don't know about the price of crude then but I think it was nearly $2 to the pound then and it's what? $1.40 or something like that now.

[R1Geezer]

because only sad people drive diesel cars and they must be punished.

[youngmafbog]

Thanks R1, but I only get 18 mile a gallon out of my diesel car so I sure as hell would not want it powered by petrol under this governments tax regime!

[jake-the-peg]

Well if you really must drive a tractor youngmafbog!

[jake-the-peg]

Of course you should be thankful theies aren't in power.

During the summer you'll recall they were going on about stabalising the cost of fuel by varying taxation.

So now the price is falling again they'd be increasing tax to bring the price up again.

Not hearing much from Cameron about that at the moment - I wonder why

[jake-the-peg]

Must get a new keyboard! I'm sure you worked it out

[Octavius]

The price of diesel at the pump always falls behind on oil prices because the price of oil today is the price "out of the ground", it takes some weeks (probably 4 � 6) to be turned into diesel and get to the filling station.

A few other factors should be taken into account:

1. Modern diesel cars are 20-40% more fuel efficient than petrol cars, and modern regulations mean they are polluting less than they ever did. So people are seeing more benefit and thus buying diesel cars. The demand is increasing. Also in particularly bad winters the demand for distillate heating oil is high, so this affects the price of diesel also.

2. About 9% of a barrel of oil is used to produce diesel. When demand goes up, refineries have to change their refining and distribution system which may take several weeks to implement.

3. Of that 106ppl about 72p goes on fuel duty, which is a constant and generally changes annually. Between 1993 and 1999 there was a rapid increase with duties on fuel increasing by 3% above inflation. This was due to a major change in petrol taxation in 1993 when the Conservatives introduced the Fuel Price 'escalator'. This was a way of the government making money and also to help protect the environment by discouraging people from using their cars.

One could argue that these forces will affect the slow barrel2pump price fluctuations when prices decrease. Yet, seems to occur much faster when there is an increase.

[Octavius]

Needless to say that nr 4 would have been the value of GBP against USD, but jake already mentioned that above.

[rov1200]

I don't think its anything to do with oil company profits. Must be Rotterdam where they sell the stuff. They even had a full tanker drifting about the oceans because no country wanted to buy the stuff.

[Avatar]

Im with you on that question ned.
None of the reasons quoted hold any water with me. diesel demand hasnt suddenly shot up recently, the duty isnt affecting it. It has to be the petrol companies ripping us off as usual and then coming up with bullsh1t reasons why they arent lowering. As been said, if theres a 4-6 week delay ho w come when a barrel goes UP it hits the pumps almost immediately. Strange that.
And as for the "tractors" and pooey diesel comments; yawn.

[Octavius]

It�s a fair point, and one which I mentioned above.

The average price of diesel in Sept 2007 was 96.9ppl whilst a barrel of oil had risen in that month to $77. By October 2007, the oil had reached $83 (+7.6%) a barrel with diesel at 99.8ppl (+3%).

Between January 2007 and December 2007, the price of a barrel of oil went from $53 to $91 (an increase of 72%). In the same year diesel started at 92.1ppl and ended at 106.2ppl (an increase of 15.5%), or 14.1ppl, 2pence of which was an increase in duty.

Let us not also forget factors such as wars in the middle east and the Coryton oil refinery fire at the end of October 2007 as contributing factors to the UK, as well as the fuel duty additions.