Petrol prices - cheaper than a decade ago

[AF62]

Yesterday I did something I never thought I would do again; buy petrol at 99.9p a litre (at Costco).

Since petrol is a byproduct of refining crude that you can't fail to produce if you want to continue to run the refineries and produce the rest of the products which are needed (stopping a refinery is hard and expensive, and re-configuring to produce less petrol is even more so), then given the shenanigans going on between the oil producing countries and the lack of people buying because of the lock-down, then there is a view that the barrel price of petrol could fall to zero.

Obviously the excise duty on fuel (plus VAT) stops it going below 69p a litre unless someone wants to sell at a loss, but I wonder how low the petrol price will go.

[Dod101]

Holders of Shell had better enjoy tomorrow's dividend because Shell must be losing money hand over fist at the moment and I cannot see how they can avoid at least a cut if this continues.

Dod

[AF62]

Obviously the excise duty on fuel (plus VAT) stops it going below 69p a litre unless someone wants to sell at a loss, but I wonder how low the petrol price will go.

Isn't government taxation a % of the base price of petrol? There for 80% tax (say) of £zero is...errrrr.....zero?

So maybe we can all look forward to free petrol - for a while at least. Time to buy 'What V8' magazine

No, fuel duty is a straightforward 57.95 pence per litre, with VAT of 20% on top of the net price (cost of goods including the fuel duty), so tax on tax, but that is another story - https://www.gov.uk/tax-on-shopping/fuel-duty

So even if a barrel of petrol goes into a negative price in the refinery because they have nowhere to store it and it keeps coming out the pipe, the government will still get their money when it is sold.

[swill453]

No, fuel duty is a straightforward 57.95 pence per litre, with VAT of 20% on top of the net price (cost of goods including the fuel duty), so tax on tax, but that is another story

Even if fuel duty was a percentage, then it would more correctly be stated as (something like) 150% to 200%. Because for VAT for example we say it's 20% on top of the net amount.

Scott.