What Goes Up Must Come Down (Unless it’s Petrol Prices Apparently)

While I was filling up my car this morning I found myself looking at the price, 142.9p for a litre of diesel, and thinking, That’s a good price – it has come down a lot recently!

Then I checked myself and thought, hang on, what planet am I living on? 142.9p may be better than the eye-watering 155.9p that I found myself paying at the end of April (when the whiff of a tanker driver strike was in the air) but it is still incredibly high.

It has always struck me, in relation to petrol prices, that as soon as there is any world event which may impact the petrol price that the forecourts react as if they have a hot line to the Pentagon or the Kremlin. Imagine the scene: Phone rings, Rob (25 year old, white male, single) answers, “Yes, Mr President, the manufacturing figures are down in the USA – sure I’ll put another penny on unleaded”.

So why then don’t the prices ever come down as quickly?
I heard a spokesperson for one of the big oil companies on the radio talking about the supply chain and how the priced reduction has to filter down through the system and that it was all to do with refining and plastics, etc. Hmmm, if I was being cynical I would say that it’s because they don’t like cutting the price and they do whatever they can to keep it high for as long as they can – with the true price of a barrel of crude only being a small factor in how much we pay at the pumps.

So, what can we expect the price of petrol to do over the coming months? Basically, we should see a fall in the price back below 140p over the summer. However, that is just softening us up for the Government induced hike in tax which is due in the third quarter and we will, aligned to an inevitable upward spiral as we approach winter, see the price around the 148p mark by the end of the year.

Whoever said, “what goes up must come down” (Newton it seems), was clearly not au fait with the forces of politics, economics, smoke, mirrors and big business, all of which contribute towards the price we all pay at the pumps!

What do you think about petrol prices and the influence outside factors have on them? Let us know in the comments below. Also, if you found this post interesting, please share it!