Price of oil vs Price of Petrol in Ireland – a comparison
Here’s an updated version of a graph that I originally put together last year. It shows the movement in the price of Irish unleaded petrol (as per the AA Petrol Price page) vs the price of a barrel of oil (the price of light sweet crude as is always quoted on the news reports when referring to the price of oil).
I’ve been trying to decipher what this chart is actually telling us.
I was originally inspired to rerun this analysis because its obvious that despite the massive fall in the price of a barrel of oil in the past 6 months, we haven’t been seeing similar drops at the petrol pumps. And this graph is showing us that thats the case – the green line for the oil price is below the red line for the petrol price.
Yes, all bad and not very nice for us consumers.
But, as you can see if you look further back in time, when the price of oil was skyrocketing in mid-2008, we were somewhat shielded from the full impact of that – illustrated by the massive gap between the red and green lines during that time.
So, a sort of petrol pricing swings and roundabouts. It looks as if petrol retailers didn’t make as much money as they could have done last year, but are making up for it now.
7 Comments
Is the petrol price taking into account the 8 cent per litre tax added in the budget last September?
Have you taken into account the fall of the dollar esp in the last 12 months ?
Is the price of crude oil used for your graph in Euro or US Dollars. I cannot read the left axis.
A very poor analysis as the duty on fuel is fixed whether oil is $1 a barrel or $200 a barrell. Also the cost of refing oil inot motor fuel also remains fairly constant as does the retail / distributor margins.
A better analysis would be the change in price of Home heating oil as this is not subject to fixed duty and more closely follows international oil movements. – August 2008 €1100 / 1000 litres, March 2009 €405 / 1000 litres
The change in the dollar from $1.60 / €1 to $1.30 / €1 also affects prices.
.. I cannot read either axis! And I agree with pmc – a very crude analysis. About the best that could be said for it is the rough ‘indication’ that an increase/decrease of 100 units in oil price will give rise to an approx. increase/decrease of 20 units in price at the pump – but then I can’t read the axes, so that’s guesswork too!
There are a large no of factors influencing prices at the pumps, including oil source & quality, auction price paid, transport insurance, dollar v euro, refinery margins & inventory, timing of wholesale purchases, shipping costs, wholesale margins & inventory, excise taxes, retail margins & timing of purchases. I’ve yet to see a credible formula that relates oil price to retail fuel price for anywhere, not just for Ireland.
If anyone knows of one, a heads-up would be appreciated.
Many thanks to you all for your comments.
The reason behind this analysis was never intended to be scientific – more a look at the price of petrol from a consumers perspective – and to somewhat dispel the notion that just because RTE says the price of oil has fallen, or risen, that we can’t expect to see immediate decreases, or increases, in the price of petrol. We’re all used to the bleating we hear from some organisations when petrol doesn’t fall in line with the price of a barrel of oil – this was aimed to show that the prices rarely follow each other exactly.
The graph is showing how the price of oil (as is normally quoted on the radio when we’re told the price of oil has moved) has moved compared to petrol from a baseline of December 2006.
The left axis is the % change in prices since that date.
This doesn’t include the impact of taxes, duty or exchange rates – I’m not sufficiently skilled to construct such an intricate model.
For those that know more, would it be overly simplistic to say that the reason red line (petrol) didn’t chase the green line to the heights in 2008 was because of the exchange rates?
And the reason that red line hasn’t followed down with the green line now is becuase of the extra taxes put on by the government?
Re oil to petrol price comparison, interesting to compare with http://www.whatprice.co.uk/petrol-prices/petrol-oil.html, which is about 2 yrs old, but legible