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  • Writer's pictureS Potter

Same Fuel, Different Prices, Why?


What decides Garage Retail Fuel Prices?!


If you drive around the UK you’ll notice a huge variation in fuel prices. Whether in the town, a large city, in the Countryside or on the Motorway, you could be paying anywhere from say £1.10 per litre to £1.40, and perhaps more. Why?.... It’s the same products…. It carries the same duty and VAT. There may be slight variations in delivery costs but that doesn’t make such a huge difference. So lets have a look at a few examples.


MOTORWAYS: If you’re brave enough to fill up at a Motorway you’ll need a fat wallet! Unless of course you have a fleet fuel card and don’t care about the price? Now we all realise that if you’re desperate for fuel when on the Motorway, you are a captive audience and the fuel retailer won’t have any sympathy for you and you’ll have to pay the price. The only reasons that I can come up with is that there is no competition and you have no choice. I do recall when working for a French oil company many years ago that they wanted the franchise at the new Clackett Lane M25 Motorway service area, they had to pay the operator a massive sum of money to get the sole rights to brand that site. However it was then taking 8 taker loads every 24 hours so I guess it was worth it to them!


CITY / TOWN: This can vary by a large amount even within the same city, why? The logistics cost can’t be any different within the same city yet the price can be different. For example, take Leicester today. A branded garage in one side of the City is selling diesel at 115ppl and another of the same brand is charging 119ppl. Same brand, same city, same logistics cost. So why the difference? Well perhaps one of those garages is near a supermarket, or perhaps two supermarkets? So not real economics of cost but selling for as much as they can get away with in any one area?



RURAL: I’ve just returned from holiday in Cornwall. You should see my holiday snaps, trucks, vans and Garages, wow, something to share with the family on a cold winters night! But looking around that wonderful county again there was much disparity in Fuel prices as I drove around. Many garages were asking £1.21 for diesel which seems remarkably high to me when there are 2 refineries in South Wales, just across the Bristol Channel and 2 excellent sea terminals on the South coast, so logistics costs should be about as low as you can get them, yet the prices seemed to be well above national average prices, again why?


CONCLUSION: Well now having looked at the evidence I can only come to one conclusion. The Garage Retail Price is based on………… whatever the oil company/garage can get away with! So there it is, no real cost basis, best if your local garage is near two or more supermarkets and not on a motorway.


SOLUTION: Commercial Fuel Cards are priced on a mechanism based on the Rotterdam Spot Market, the method that every oil company uses to value and re-value their own fuel stocks each day/week. Fuelcard Centre Ltd only provide Commercial Fuel cards, it’s our speciality and with experience going back to the dawn of Fuelcard time, I think we’ve a pretty solid handle on the best fuel cards for you business. Have a look at www.fuelcardcentre.co.uk and give us a call or an email, you’ll soon gain the benefits of a great service and the best commercial fuel cards.


A.Potter


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