Friday, 18 October 2013

Petrol down, gas up

It's a puzzle for anyone used to seeing prices for the various types of energy we use moving backwards or forwards hand in hand.

The cost of filling up the car accelerated ahead but now it's gone into reverse. Well, slightly, by 5 and a half pence a litre.

But the gas price bubble just seems to grow bigger and bigger. More than 8% bigger with British Gas's latest price increase.

One explanation is that petrol prices are affected by movements in the dollar/pound exchange rate, because crude oil and refined petrol are both priced in dollars.

The pound has enjoyed a significant recovery against the dollar in recent months, jumping from about $1.50 in value to around $1.60.

So while crude oil hasn't moved much in world markets, the cost to us in the UK has gone down.

Gas, on the other hand, is traded in sterling in the UK. There is less of the currency effect.

Not everyone in the energy market believes there has been enough of a rise to justify the price increase.

But British Gas says the cost of getting hold of gas and electricity accounts for a third of the jump in bills.

Will the petrol drop compensate for the gas hike?

If you fill up the car once a week, you are likely to gain more than you lose.

However, occasional drivers will still have cause to shiver from this week's energy news.

The petrol benefit will be outweighed by the cost of keeping warm.

Some of your responses on twitter:

Shhh, don't say it out loud or they'll hike the petrol up too!

Lack of gas storage is a partial explanation.

Because warned the companies that would cap their charges, so they're all rushing to the counter now!
Basically, the reason is policies intro by that the coalition won't reverse.

Petrol Fuel Duty frozen and petrol co's don't need tens of billions of new investment in plant and distribution.

different raw materials. Duh.

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