Oil price drop not being passed down to LPG customers

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ghost123uk
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Oil price drop not being passed down to LPG customers

#1 Post by ghost123uk » Tue Jan 19, 2016 9:35 am

The recent huge drop in the prices of crude oil has resulted in many garages reducing the price of petrol to less than £1 per litre. Forecasts indicate this may well continue to fall. Whilst LPG prices have fallen in recent months, they have not fallen in line with petrol. I wonder why ?
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LairdScooby
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Re: Oil price drop not being passed down to LPG customers

#2 Post by LairdScooby » Tue Jan 19, 2016 12:37 pm

I've heard LPG is a by-product of the refining process that gives us petrol, diesel and a few other products from crude oil. Given it's a by-product, i wonder if a very small value is attached to it by the oil companies and as such most of the price is made up of Fuel Duty the same as petrol/diesel?

Just a thought, no idea if it's right though!
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Brian_H
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Re: Oil price drop not being passed down to LPG customers

#3 Post by Brian_H » Thu Jan 21, 2016 10:18 pm

LairdScooby wrote:I've heard LPG is a by-product of the refining process that gives us petrol, diesel and a few other products from crude oil. Given it's a by-product, i wonder if a very small value is attached to it by the oil companies and as such most of the price is made up of Fuel Duty the same as petrol/diesel?

Just a thought, no idea if it's right though!
To a degree yes, but the duty is much lower on LPG than petrol/diesel so doesn't play as much of a part.

A lot of it will be what people are willing to pay - if their sales start dropping off the price seems to drop as well to compensate.

The price has tended to rise when weather is colder as its used for heating/cooking as well, the increased demand increases the price.

It does vary greatly though - The most expensive prices are double the cheapest on lpg, you don't get that with other road fuels.

Gilbertd
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Re: Oil price drop not being passed down to LPG customers

#4 Post by Gilbertd » Thu Jan 21, 2016 11:14 pm

As far as I'm concerned, the differential is there. It's not that long ago I was paying almost 80p a litre for LPG at a time when petrol was £1.20. Now petrol is down to around a pound, LPG is down to under 50p in many places.
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rich r
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Re: Oil price drop not being passed down to LPG customers

#5 Post by rich r » Fri Jan 22, 2016 7:55 am

Propane's biggest market is as a chemical feedstock, rather than a fuel. Its price has less to do with that of crude oil than the supply and demand requirements of the chemical industry. I've only very rarely had to pay more than 50% of the price of petrol for LPG at the pumps, due to the far lower base price and tax.
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