Petrol goes back up... Funny that.

[Mom]

I am so much a victim that I give up. Really I do. I try and argue my position and get told I dont understand business, I am totally consumer orientated I can not see the BIGGER PICTURE.

I understand that the world commodity market is volatile, it moves by the minute, sometimes by the second. Once upon a time I used to be involved in the spot currency market, that moves really fast sometimes. I never dealt in commodities, so use my "gut" to know that it must be the same.

My clients used to buy forward cover to avoid huge peaks and troughs, so they could deliver their product at the same rate most of the time. Sure they used to have to increase prices (they never decreased them) but it was a planned and budgetted for increase, not a monthly, weekly, daily movement like we see with petrol at the pump.

Perhaps I am actually ignorant, I wont be that surprised, I have heard it often enough. Call me Trevor and stick a candle up my bum if there is not more than a little bit of making twice the hay you usualy do in a normal season, about the way petrol prices go.

[Meanie]

Well, if you think they make a lot of money then buy some shares in the fuel companies. They are all publicly listed. Then you could share in the profits.

I would but cant afford to cause i,m paying too much for petrol

[steve_t]

Call me Trevor and stick a candle up my bum if there is not more than a little bit of making twice the hay you usualy do in a normal season, about the way petrol prices go.

Evidenced by the price at the pump going up as soon as crude goes up or the NZ$ goes down, but taking at least a week or three to go down if the opposite happens

[davereid]

I don't expect you'll believe it, but retail petrol has incredibly low margins. The oil companies make their money before the crude oil gets sold to the refiner for conversion into petrol & diesel fuel.

Its very common in vertical markets - that is anywhere a product is controlled by one provider from source to consumer.

For example, you might be selling a special product, made of potatoes.

You might grow the potatoes in New Zealand.

But we are a high-tax country, so when you sell them, you will sell them to your Singapore branch, almost at cost. Singapore is low tax, so you will do all the production, all the packaging, all the profit making in Singapore, as you will pay little tax.

Then you will export the product, back to N.Z. where your N.Z branch will buy the product, and you guessed it, sell it at virtually cost.

Plenty of profit made, but no tax paid in N.Z, or anywhere else with high tax for that matter.

[Elysium]

What I can't understand is why the price goes up on petrol straight away because oil prices go up. But why straight away?

I mean the oil that increased in price is still sitting in its drum and hasn't been refined yet but we suddenly have to pay more for petroleum that was refinded long ago from oil that was cheaper.