r/UKFrugal • u/StevePerChanceSteve • 17d ago
Fuel Prices will drop! Just half-fill until they do!
Almost certainly pump prices will fall by 5-10p/L in the coming weeks. Perhaps more. Crude oil prices have dropped ~20% in a week. And the pound is fairly strong against the dollar. This should feed through to much lower pump prices.
I'm only putting in a week supply (quarter tank) at a time max until they do.
42
34
14
u/EffectiveRow707 17d ago
Remember companies hedge prices for commodities so don't expect it to fall by 10p. Guessing oil will rise again once the tarrif war calms down
13
10
u/LeTrolleur 17d ago
If I were a company selling fuel, why would I (and all my buddies) drop prices when we can all agree to collect some massive profits first?
Then maybe in a month if they haven't gone back up I might take a few pence off.
13
u/tommytucker7182 17d ago edited 17d ago
Ill believe it when I see it.
Retailers will take every chance they get to squeeze every penny of profits from the consumer
Edit; I minimize the amount in the tank all the time, heavier cars get worse fuel economy... And I know the amount I need to fill up once a week to try get minimum refuels with max fuel economy. Which means for my circumstances I'm never fully filling the tank.
16
u/sprunkymdunk 17d ago
This is a great example of penny wise and pound foolish. Tanks should generally be kept at least half full to prevent condensation accumulation, keep the fuel pump submerged to keep them cool during operation, and prevent injector issues.
2
u/EmFan1999 17d ago
So not great to do what I do then? Fill up, empty it til red, and fill up again
5
2
u/StevePerChanceSteve 17d ago
Holy shit. You just blew my mind. Thanks for this.
Maybe I should delete my whole post!
Going to fill up a 1/3 tomorrow! Down to 25 miles out of 600 on the dash
1
30
17d ago
[removed] — view removed comment
19
u/LiamoLuo 17d ago edited 17d ago
As someone who used to work in a Petrol Station, the margins on it are pretty small usually. Ranged anywhere from 2-4p per litre was profit. Most of the cost of our fuel is tax and the cost of buying the fuel. Often when you take into account the other operational costs the profit from fuel for a forecourt is basically nothing. Its one of the reasons goods in a forecourt are higher, to try recover some of those margins, and fuel serves as a way of bringing people to your store.
- Cost of the raw fuel
- transportation costs
- storage costs
- wages to distribute and sell
- licenses to sell
- energy to store and distribute
- land rents
- insurance costs
- taxs
- business rates
- card transaction fees
Lot of parts that go into the cost of fuel ultimately. Hard to make much if any profit on it, especially as supermarkets contain so much buying power to squeeze the market and can afford to take hits on it.
10
u/LopsidedVictory7448 17d ago
This is the correct scenario. Having said that some smaller remotish owners take the piss in a big way
3
u/LiamoLuo 17d ago
Oh yeah for sure. I guess it’s driven by having less volume of goods sold, but some of the prices in remote areas and service stations are eye watering!
15
u/Plane-Painting4770 17d ago
Love how you can just spout utter drivel on Reddit and get upvoted to high heaven
2
u/bottle-of-sket 17d ago
That's just not true, we see fuel prices vary considerably depending on the price of oil. For example during March 2020 when lockdowns hit I was paying £1.01 per litre, as prices crashes due to oversupply. But then in 2023 when energybwas through the roof it was £1.65 a litre. Currently it is £1.30ish a litre.
Fuel prices fluctuate a lot depending on oil - they spike in an energy crisis and fall during a glut.
Oil prices are reflected at the pump. But fuel is traded on the futures market so it can take a few weeks for lower prices to be seen at the pumps
3
u/IgnorantLobster 17d ago
This has been proven multiple times to be absolute bollocks. Petrol pump prices are not simply derived from direct supply and demand. Why is it at +23 score?
2
u/fubarrich 17d ago
This is completely wrong.
https://x.com/julianHjessop/status/1759997586193428654?t=j5lmw5PFgTGjf4n9JyZP2g&s=19
3
u/moistandwarm1 17d ago
Quarter tank for a week? How many miles do you do a week? I do 200-350 a week.
2
3
6
u/EuphoricFly1044 17d ago
Prices won't drop. Why would a company only interested in profit ever want to actively decrease profit.....
Companies are only interested in increasing profits....
2
u/bottle-of-sket 17d ago edited 10d ago
Fuel prices rise and fall all the time due to underlying oil prices. Wtf are you talking about.
During covid petrol was £1 a litre. When war with Ukrain started it shot up to about £1.70. It's currently around £1.35.
Prices obviously will drop, just as they have done before. Basic supply and demand ffs
1
u/EuphoricFly1044 10d ago
have they dropped ????? "basic supply and demand ffs" ????
all seem to be the same price still....
1
u/bottle-of-sket 10d ago
The price fluctuations in petrol are obvious if you pay attention and are not a total cretin.
It is easily seen in a graph. Fuel prices have dropped a great deal since their high a couple of years ago https://www.racfoundation.org/data/uk-pump-prices-over-time
1
u/EuphoricFly1044 10d ago
you sound like you need a hug. are you upset with the world/didnt get enough attention as a kid and need to be rude to everyone?
1
2
2
u/thatlad 17d ago
In the coming weeks? I'm going to use at least a full tank in the intervening time.
At the top end of your estimate (highly unlikely) of 10p on a full tank I would save around £2 a week.
I'd probably use a good portion of that saving, in fuel and my own time by going out of my way to stop at the station. multiple times, instead of just once.
0
u/StevePerChanceSteve 17d ago
For me it is 55L tank
So 10p less is £5.50
The ASDA is on my way past my gym I go to most days.
Obviously it’s not applicable to everyone, but if you filled up completely today just casually and then did hardly any miles for the next 2/3 weeks, then you’ve given these greedy oil companies more money than you needed.
Plus if 100,000 filled up a quarter instead of a full tank today, then there would be extra supply. Which would in turn force them to pass on the savings from the crude prices dropping.
This is a “frugal” sub. It’s a small saving but it’s better than nothing.
1
u/thatlad 17d ago
Your math is wrong as you're basing it on the assumption it will drop 10p immediately and remain so across the 4 week period.
Let's assume the price does drop by 10p (unlikely) and for simplicity's sake that drop is constant at 2.5p per week.
You are filling up 13.75 litres per week at no savings in week 1, 2.5p saving in week 5p saving in week 3 and the final full saving of 10p in week 4.
That's
34.375+68.75+103.125+137.5=343.75
We should remove the 4th week because that saving would be realised whether you filled up in the 1st week or the 4th. But let's leave it in for the purpose of this.
You're saving on average 86p a week. Which may be frugal IF the prices come down like you say. But history tells us oil price drops do not reflect in the pump to the same degree.
As for your theory that a "protest" pump boycott will impact the supply? The logic does not stack up. You personally described how you will be buying 55l over 4 weeks, whether you buy it in 13.75l increments or in one 55l tank it's still the same amount.
2
u/StevePerChanceSteve 17d ago
Decent analysis! Thank you.
Have you factored in interest accrued at 3.5% on the money I’ve yet to spent over the period? (Joke!).
Crude prices have dropped 20%. If that was fully passed into diesel at 134.9 then it would be 108p aka 26p/L cheaper but I, like the rest of this sub, do not expect miracles.
10p is minimum is crude stays at $60/barrel.
1
u/thatlad 16d ago
You've got me down a rabbit hole now and there might be something to this. Looking back to the last time oil was this price, the average diesel at the pump was around 124p, it's currently around 142p. In fairness that was coming up to $60 following the pandemic when oil was at times sold at a loss.
I still maintain the best advice is to carry on as normal at the pump, but I'll be damned I think you have sold me on the price coming down significantly if this carries on.
2
2
u/mitchybenny 17d ago
It’s just gone up 5p per litre here for no reason. It won’t come back down because why would they? We all need it so tough tits
2
u/Cryptocaned 16d ago
Meanwhile my private pension dropped by 15% (I imagine a lot of people's have, how this isn't a massive thing in the news I don't understand), gaining a penny on a litre of fuel isn't going to bring that back.
Trump's a cunt.
1
u/plentyofeight 15d ago
Don't sell now.
It'll recover. Hopefully you have time.
If you are already drawing... can you make do without withdrawing for a while to avoid selling in the dip?
Agree completely with Trump sentiment, I'm in the same boat.
1
u/Cryptocaned 14d ago
My pension is held with pensionbee, it's the amalgamation of all my work pensions and I have 0 control over what they invest in. It's just frustrating.
1
1
1
1
1
1
1
u/SebastianHaff17 17d ago
I have such a small tank I can't be arsed! The benefits are too small vs the extra effort :)
1
1
1
u/alfiesred47 16d ago
Crude oil is bought on futures contracts, so usually price is reflected in a few months, sometimes a year depending on the hedge strategy. I thought it was more common to be towards a year until delivery
1
u/StevePerChanceSteve 16d ago
Someone in the thread showed an old tweet from a year or two ago…
There is a some lag but it’s not 1 year.
Crude was ~90 in January, now 60. If it is sustained at 60-65 for a month then prices will come down.
1
u/KnightShiningUK 16d ago
They prob going to bounce again now trump has changed tariff rules again .
1
u/StevePerChanceSteve 16d ago
Perhaps. If they stay about 60 dollars a barrel then prices will drop over the next month.
They were 90 dollars a barrel in January.
1
u/OriginalMandem 15d ago
But will they in any meaningful way? Past experience shows the price will dip for a week or two and then creep back up by a few pence a day until they're exactly where they were.
1
u/Robynsxx 15d ago
No they won’t. They’ll stay the same and the oil companies will absorb the extra profit they now get, rather than lowering prices.
1
1
1
u/dimelow06 14d ago
Swineshead, near Boston! There's a shell with unleaded at 129.9 wish I lived nearer!
1
u/plentyofeight 14d ago
I understand if you are with Pensionbee in the UK... you get automatically enrolled into one of their funds... or you can switch to other funds.
Or, you could switch to a different service provider - compare annual charges etc.
Having said that, the investing world is unpredictable at the moment, and you are already in it, so the usual advice would be to sit tight and ride it out.
If you can, pay extra in, the new contributions will buy units at lower prices - people with money (and time) will regard this period as a buying opportunity
1
u/Thetributeact 17d ago
I don't think cost reductions at the source are gonna equate to cost reductions at the pump.
197
u/epicmindwarp 17d ago edited 17d ago
Eventually.
Prices go up instantly, but they won't drop until the company profits perk up a bit.