Monday, June 16, 2008

Petrol crisis? What petrol crisis?

In the wake of the current industrial action by tanker drivers, and more planned action at the middle of the week, some garages have been raising prices.

Here in the South West we're amoungst the worst affected by the strike, by now pretty much all of the filling stations in mid-Devon seem to have run out of diesel, while most of them have either run out, or are now rationing, unleaded petrol. There have also been some price rises by those forecourts that still have fuel left, although it's debatable with this to protect supply or simple profiteering. But even here in the South West 199.9 pence per litre, well above the average pre-strike price in Devon of 117.9 pence per litre, now being charged by one forecourt in Exwick is a little extreme.


For my North American based audience that's £9.09 per Imperial gallon, or US$14.85 per US gallon at the current exchange rate of £1.00 to US$1.96.

So please stop complaining about your US$4 gallon of gas. Because its getting annoying, and even at the average pre-strike price, it looks awfully good to us over here. It's been a long time since anyone in the UK paid 54 pence per litre for petrol.

Despite reassurances by Downing Street to the contrary, I think a US$15 gallon of gas, with two more weeks of on again, off again, industrial action still planned, counts as a crisis. Don't you?

Update: Makes me wish for the good old days...


  1. People in the U.S. are shocked because of their expectations. Compare this graph with the history of petrol prices in the U.K: People make long term decisions based on long term trends - such as what kind of car to buy; how far away from work to live; residential/commercial/industrial zoning - and when those expectations are violated, those least able to accommodate the change - the poor - suffer real pain, especially with the grossly inadequate social safety net here.

    I'll grant you, however, that the loudest whining comes from folks who have access to expensive megaphones like the internet, and could afford to make a switch to more efficient transportation.

  2. Anonymous8:19 am

    I can't help but wonder if they'd jack the price higher if their segmented price board allowed for it.

  3. Google can do pretty nasty conversions to ease comparison.

    This being said, some forecast oil prices to double every 5 years from now on. If this is correct, we'll have more than strikes on the roads.

  4. My good sir, you speak nothing but the truth!

  5. The UK has some of the cheapest petrol in Europe, but it's the tax that pushes the prices so high.

  6. Why does it matter that most of the cost is tax?

    Something costs what it costs, the fact that part of the cost is tax doesn't mean that you don't have to pay the tax if you don't want to...

  7. The price of oil costs what it costs, irrespective of wether you are in the US or the UK, but the tax is imposed by the government, and that is the big difference between paying $4 or $14 a gallon.

  8. Yes, but, so what? I can't turn up at a petrol station and say "I don't agree with government policy on fuel taxation, I'll have it without the tax today please". What does it matter that most of the cost is tax if I don't have any choice about whether I pay the tax?

    I'm sorry, but I really don't understand your point.

  9. We North American readers certainly can complain, the price of oil has gone up 30% since the start of the year and that effects not just the price we pay at the pump but also things like food, and as a result pushes up the price of everything because people need to be able to afford food. The problem is we pay very little tax on fuel and so there is very little leverage.

    In the UK the tax rate is high, like 117% high, and that has not changed for a long time, way before the oil crisis so the increase in the price you pay at the pump has grown a lot more dramatically. You cannot blame the market for the price of oil any more than you can blame the stations for taking advantage of the protests because thats the way economics works, supply and demand, but the Government can change its tax rate in the face of a crisis for the good of the nation.

    So, no, you cannot refuse to pay the tax on the pump price, but you can contact your local representatives and give the Government hell, that is after all what they are there for.