Comments on: The $2 litre is here. What a difference 12 hours makes. But did Big Oil raise prices on Budget Day hoping we wouldn’t notice?

By: Uroskin

Uroskin — Thu, 29 May 2008 01:35:49 +0000

We’ve had $2+ petrol prices on Waiheke Island for a long time. Welcome to the real world (where it’s often already $3 a litre).

By: insider

insider — Fri, 23 May 2008 09:34:20 +0000

But that is not their normal margin. MED puts it at around 18-20 and that is an income margin rather than profit.

By: Macros

Macros — Fri, 23 May 2008 05:47:47 +0000

So, just petrol, based on their “normal” margins of 30c/L or so… that’s a nice NZ$300 million, give or take a few mil.

By: insider

insider — Fri, 23 May 2008 04:50:18 +0000

You have to remember that the margin is a gross one. All the costs form the time it leaves the refinery have to be added on.

Most of hte diesel is sold commercially so you can instantly take at least 5cpl off the price – that’s the most basic offer to most fuel card holders from Chamber of Commerce and caravan club members up. the big guys get much larger discounts.

So i think you can “discount” your margins

By: gary

gary — Fri, 23 May 2008 03:34:13 +0000

Macros, MED publish that on a quarterly basis oil tables from MED from some back of the envelope calculations, is it about 2.7billion litres of Diesel and 3.1b litres of Petrol, so @10c/l it is in the realm of 5-600 million dollars.

By: Will de Cleene

Will de Cleene — Thu, 22 May 2008 22:10:23 +0000

Thanks for the replies, guys.

By: Macros

Macros — Thu, 22 May 2008 11:41:20 +0000

Insider: yeah, AIP is good, except it’s delayed a day.

Donations accepted for a Platts feed

8 or 10 cents, close enough really. If the current margins are tight, then almost doubling them must be nice for the fuel companies. It’s almost pure cream!

I’d be interested in knowing the total petrol consumption in NZ. I imagine even if the profit is only 10c/L that they’d be making a decent amount of money!

By: The Optimist

The Optimist — Thu, 22 May 2008 10:58:21 +0000

I was hoping for a 60 cent petrol tax drop in the budget to take back to $1.20, but it didn’t happen. Spare a though for the UK – now about $2.85 there with their crazy taxes.

With tax making up nearly half the cost, the price of petrol doesn’t bother me too much. I think just think of all those lovely schools and hospitals I’m paying for…

By: insider

insider — Thu, 22 May 2008 10:34:06 +0000

Good to meet you macros. I find your info very useful.

For a lead on Singapore prices you could try the Australian Institute of Petroleum but you’d have to do another currency conversion. Platts is best but you have to pay…

I agree totally with your analysis but I must have misread your graph – I thought it was at about 12c. Ilooked at the pretty picture and didn’t bother looking at the numbers. I’m powerpoint not excel.

By: Macros

Macros — Thu, 22 May 2008 09:57:01 +0000

Insider: thanks for referencing my site

As a note, after the last increase the NZHerald said that margins were down to 22c. My graph (which is based on US prices as I can’t find Singapore pricing) showed a margin of about 14c after the last increase. So maybe take the margin on my graph & add 8c for NZ margin.

My rough estimates show that prices go up when the margin (on my graph) is less than about 15c. Decreases happen when the margin is over 22c. So adding on the 8c means that the target profit margin is about 23-30c. Current margin is about 21c, which can’t be that painful!

Macros.