nomisd said:
Something that I have never really understood about petrol prices is:
Companies like Shell & BP get the oil out of the ground, refine it, transport it to the petrol stations and then sell it, all using their own resources. Yet when the price of a barrell of oil rises, they turn round and put the price of their petrol up - Why? Surely they are not buying it from anybody as they get it out of the ground themselves???
The term for the process is "mark to market." Conversely, if and when the world-wide price drops, the vertically integrated producers have to drop their prices, too. Usually, the only variation is at individual retail outlets which usually sell at a combination of cost (rent and labor besides pure fuel cost) and what the market will bear in their narrow neighborhood.
Speaking of which individual variation, my conspiracy theories leaped to the fore this past week when every single station in my two-town market sold regular unleaded for the same price for 3 days ($2.79!)
This morning was the first variation I've seen - one station went to $2.89!
