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Thursday, 13 October 2011
Petrol is cheap

Looking at the price of petrol around Oxted, I see that it is all currently under £1.50 per litre.  See here:


In 2008 Charles Arthur of the Guardian pointed out that historically the price of oil had not risen much in real terms.  However since then however there has been an increase of over 50% in the petrol price, which I guess puts it above the 1975 and 1981 peaks (in real terms), but still less than the all time 1917 price.

However I see that the price of petrol is still cheaper than carbonated sugar water, which was on sale at £1.50 for two half-litre bottles in a supermarket this weekend:
image

I find it amazing that it is cheaper to mix a fizzy drink than to dig oil out of the ground, transport it halfway around the world, and refine it.  Well of course the selling price of a product does not only reflect the cost of production, but other factors also such as the price that consumers are prepared to pay:

From the marketer’s point of view, an efficient price is a price that is very close to the maximum that customers are prepared to pay.

I also wonder how closely the price of coca cola is influenced by the price of petrol (transportation).

Posted by bigblue on 13/10/2011 at 08:38 AM
Filed under: EuropeUnited KingdomEngland • (1) CommentsPermalinkBookmark or Share

It makes perfect sense to me.  All those oil workers make a killing.

Posted by flank  on  17/10/2011  at  06:48 AM

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