Crude oil and the price of petrol
Sir, – Some of your correspondents bemoan the price of petrol relative to the price of oil (August 5th). However, the calculations are simply wrong for several reasons.
Brent crude oil for November delivery is at its highest point since the end of May; and the price of crude oil is not the relevant commodity future for price comparison unless one owns a refinery (of which there is only one in Ireland).
Refined products such as gasoline and gas oil (diesel) are freely traded commodities in their own right. The prices of the relevant futures contracts are easily available on the internet. The prices generally move in sync with crude oil, however the demand for and supply of the end products can deviate depending on the weather and refinery issues – as seen in the aftermath of Hurricane Harvey – causing extra price fluctuations above the price of crude.
In the case of gasoline the wholesale gross margin per refined barrel has jumped more than $5 to a total of approximately $16.
This is unfortunate for motorists but it is a reflection of the global free market in which Irish retailers are mere price-takers.
Moreover, government taxes and duties account for the majority of the pump prices. – Yours, etc,