Paul Gottfried

Ever increasing fuel costs

Posted on 16 May 2011

The price of fuel seems to be going up and up at the moment (you probably don’t need me to tell you that) but what really annoys people is that the prices don’t seem to reflect the price of crude oil. Whenever the price of raw materials go up the prices of the products (including fuel) also seem to go up.

Yet whenever the prices go down the price of fuel rarely reflects this.

I do understand that there is a lag when it comes to fuel prices and the price of fossil fuels. This is because companies have to buy the fuel in advance so the petrol prices on a certain day will not mirror the price of oil on the same day, but a period before.

I could understand this but the price of petrol never seems to go down – it might stabilize for a short time while the price of crude oil drops, and then continues to rise when the raw materials rise too.

The amount of tax on fuel obviously doesn’t help either, but I think people are getting more and more angry about how high fuel prices have got. On the other side of the coin, you can’t imagine anyone deciding that they are going to drive less, so it’s difficult to see what consumers can actually do to make a difference.

I know that most people can’t change the amount of driving they do on a meaningful level even if they wanted to, and if less people started driving the companies would probably put up fuel prices anyway just to avoid any loss of profits!