Petrol prices in Newbury Options

[Nothing Much]

do we know some like minded transport drivers?

French ones would do nicely.Every little helps.Grrp
ce

[Nothing Much]

As old folk may remember this was a good idea at the time...
http://www.youtube.com/watch?v=676WpTKtqLw.
Selective Employment Tax. Good auld Arold. KGB or not
ce

[Andy Capp]

If a shop (be it supermarket, corner shop, farmers market, whatever) had cornered the supply of a scarce and desirable commodity and was taking advantage of the consumer's need and their monopoly of supply by selling the commodity at an inflated price then that would be profiteering, but simply charging a different price for an item in different locations is just good business nous, taking advantage of the regional differences in taste and affluence. You wouldn't expect independent retailers to charge the exact same price for the same item in different locations - why would they - so I don't see why you'd expect different branches of the same retailer to charge the same unless the retailer was so centralised and rigid that it's systems couldn't cope with regional differences, and I doubt any national that inflexible would last long outside of a socialist autocracy.

What is also true is that Newbury doesn't have all the outlets enjoyed by other towns, which means we don't quite have the choice you suggest.

[Simon Kirby]

What is also true is that Newbury doesn't have all the outlets enjoyed by other towns, which means we don't quite have the choice you suggest.

No, we have exactly the choice I suggest, but I think you're expecting too much from that choice. We have a range of fuel retailers in Newbury, both supermarket and traditional, and that along with the mobility of fuel customers creates a free market, so it follows that the price of fuel in Newbury is the free-market price and the more expensive retailers are still making enough sales at that price to remain profitable even though cheaper fuel is available in town, and cheaper still within a commute. If you want Newbury to have fuel as cheap as anywhere else then you're asking for more than a free-market can deliver.

It may well be true that if we had an Asda selling fuel that they'd sell it more cheaply than anywhere else which would bring the prices down across town.

[Exhausted]

It may well be true that if we had an Asda selling fuel that they'd sell it more cheaply than anywhere else which would bring the prices down across town.

Perhaps they would, but why would they.

[Andy Capp]

No, we have exactly the choice I suggest, but I think you're expecting too much from that choice. We have a range of fuel retailers in Newbury, both supermarket and traditional, and that along with the mobility of fuel customers creates a free market, so it follows that the price of fuel in Newbury is the free-market price and the more expensive retailers are still making enough sales at that price to remain profitable even though cheaper fuel is available in town, and cheaper still within a commute. If you want Newbury to have fuel as cheap as anywhere else then you're asking for more than a free-market can deliver.

It may well be true that if we had an Asda selling fuel that they'd sell it more cheaply than anywhere else which would bring the prices down across town.

Which was my point. We are not free to make the choice we would like and the absence of enterprises like Asda means we don't have the competition for best price that other towns enjoy. As for the free-market mantra, that carries no real guarantee of anything either, partly because it doesn't truly exist.

[Simon Kirby]

Which was my point. We are not free to make the choice we would like and the absence of enterprises like Asda means we don't have the competition for best price that other towns enjoy.

For sure, you don't have the option of buying cheap fuel at Asda, but you still have a choice between many independent fuel retailers so the price you pay is set by the market. If you don't like the price that the market sets then I can't help you because that's all a free market can guarantee. If the price of fuel is an issue then I think you should complain about fuel duty because that is a far more significant factor than the margin the retailer charges on a litre, but the state needs that money and if it isn't raised on fuel it'll have to come from somewhere else. Better still, complain about the size of the state, because if we didn't have to support such an over-bloated state apparatus you could have your cheaper fuel.

[On the edge]

Perhaps they would, but why would they.

Asda are running a campaign right now to be the cheapest petrol retailer. Why? Their marketing people doubtless believe that this will make the grocery punters think their grocery prices are cheapest too and they will therefore flock to their store.

Basic supermarketing, there are only a few commodities we know the price of, keep theses low and the punter thinks you are giving good value.

BUT because the competition will generally follow suit AND they have to make money and generally pay the same wholesale price, they can only do this for short periods unless they are willing to take a hit on profits, or other overheads like wages......

So, today, Asda in your area is an advantage, but tomorrow?

[Andy Capp]

For sure, you don't have the option of buying cheap fuel at Asda, but you still have a choice between many independent fuel retailers so the price you pay is set by the market. If you don't like the price that the market sets then I can't help you because that's all a free market can guarantee.

So we have identified a problem with free-market economies: they can fail to encourage (aggressive) competition and therefore reduce pressure to push down prices?

If the price of fuel is an issue then I think you should complain about fuel duty because that is a far more significant factor than the margin the retailer charges on a litre, but the state needs that money and if it isn't raised on fuel it'll have to come from somewhere else. Better still, complain about the size of the state, because if we didn't have to support such an over-bloated state apparatus you could have your cheaper fuel.

Where have I complained about the price (petrol is about 5% of my liabilities), it's the lack of proper competition I dislike? Asda, for example, still pay the same duty as Tesco, so the tax yield per unit would be similar, so the state get their money.

[On the edge]

Free markets don't necessarily mean lowest price, they mean best price. In the case of Asda, arguably they are undercutting the local market price for short term advantage. You can still take up their offer; no one is stopping you - just drive there, move or get a stake in a local outlet; answer is in your hands, so its a free market.

[Andy Capp]

Free markets don't necessarily mean lowest price, they mean best price. In the case of Asda, arguably they are undercutting the local market price for short term advantage. You can still take up their offer; no one is stopping you - just drive there, move or get a stake in a local outlet; answer is in your hands, so its a free market.

I know it is a (semi) free market, but that isn't my point. My point is that Newbury doesn't have the competition other towns enjoy. If Asda undercut to their own detriment, than in free market that is there choice and it is them that will pay. But none of what you and Simon says removes the fact that Tesco et al. are able to capitalise on a less than completely competitive local market.

Of course, the flip side to this is perhaps higher fuel has benefits too. Perhaps we have less congestion because of it, but even then, that doesn't negate my original point.

[Simon Kirby]

I know it is a (semi) free market, but that isn't my point. My point is that Newbury doesn't have the competition other towns enjoy. If Asda undercut to their own detriment, than in free market that is there choice and it is them that will pay. But none of what you and Simon says removes the fact that Tesco et al. are able to capitalise on a less than completely competitive local market.

The free-market price isn't necessarily the cheapest price possible. More competition will generally give you a cheaper price, and with an Asda in town you might well get cheaper fuel, but the existing fuel market is already completely competitive because there are enough independent retailers in town and the consumer is mobile and able to buy out of the district too.

With an Asda in town yoou may well get cheaper fuel, but as OtE has said you might very well not see any change in the aggregate basket price because Asda, just like the current supermarkets, don't look at product lines in isolation, rather they look at a basket of lines and price those lines to optimise the profit on the basket as a whole. Different retailers do it differently, so Asda may well discount their fuel in order to get you into their shop where they'll hope to recoup the discount without you noticing.

[Andy Capp]

The free-market price isn't necessarily the cheapest price possible. More competition will generally give you a cheaper price, and with an Asda in town you might well get cheaper fuel, but the existing fuel market is already completely competitive because there are enough independent retailers in town and the consumer is mobile and able to buy out of the district too.

No fuel discounter means we don't have a completely competitive environment. Independents do not bring down the cost of fuel to the end user, they are the 'cornershop' suppliers and tend to charge more for their convenience than supermarkets.

With an Asda in town yoou may well get cheaper fuel, but as OtE has said you might very well not see any change in the aggregate basket price because Asda, just like the current supermarkets, don't look at product lines in isolation, rather they look at a basket of lines and price those lines to optimise the profit on the basket as a whole. Different retailers do it differently, so Asda may well discount their fuel in order to get you into their shop where they'll hope to recoup the discount without you noticing.

If that is true, perhaps you have some examples? However, if we had an Asda I could stop off there on my way to a cheaper shop for my groceries.

[Simon Kirby]

No fuel discounter means we don't have a completely competitive environment. Independents do not bring down the cost of fuel to the end user, they are the 'cornershop' suppliers and tend to charge more for their convenience than supermarkets.

Your complaint starts from the position that fuel should be cheaper, but that's wrong. The starting position is that in a free market the market sets the price, and as long as there are independent retailers who are not colluding on price then the market is free and whatever price the market sets, that's the free-market price. You might like the price to be lower than that, and with a different mix of retailers the price may well be lower as it would appear to be in other towns, but that doesn't make Newbury's fuel price a rip-off, it just means Newbury is willing t pay for for its fuel than elsewhere.

[newres]

Your complaint starts from the position that fuel should be cheaper, but that's wrong. The starting position is that in a free market the market sets the price, and as long as there are independent retailers who are not colluding on price then the market is free and whatever price the market sets, that's the free-market price. You might like the price to be lower than that, and with a different mix of retailers the price may well be lower as it would appear to be in other towns, but that doesn't make Newbury's fuel price a rip-off, it just means Newbury is willing t pay for for its fuel than elsewhere.

Certain goods need strict monitoring because sometimes the free market doesn't work. Without regulation, things go awry. A totally free market is as mad as total state control.

[Andy1]

Surely the duty is the rip off and then paying more tax on top.

[dannyboy]

Certain goods need strict monitoring because sometimes the free market doesn't work. Without regulation, things go awry. A totally free market is as mad as total state control.

Err, could you explain that one?

[newres]

Err, could you explain that one?

Err, credit crunch.

[Andy Capp]

Your complaint starts from the position that fuel should be cheaper

No. My position starts from wondering why we pay more than some places elsewhere. It seems we pay more because the local outlets don't price aggressively, and this is because we don't have anyone preprepared to do that. Other towns have outlets that do price aggressively, and these towns have outlets that Newbury doesn't.

but that's wrong.

I agree, but you are creating an straw-man argument.

The starting position is that in a free market the market sets the price, and as long as there are independent retailers who are not colluding on price then the market is free and whatever price the market sets, that's the free-market price. You might like the price to be lower than that, and with a different mix of retailers the price may well be lower as it would appear to be in other towns, but that doesn't make Newbury's fuel price a rip-off, it just means Newbury is willing t pay for for its fuel than elsewhere.

OR Newbury lacks competition to push prices down.

I am not saying we SHOULD have cheaper fuel.
I am not saying cheaper fuel is only a good thing.
I am not saying that our shopping basket is made more expensive for having more expensive fuel.

It is true that fuel in supermarkets like Asda might be a form of 'loss leader', but that doesn't negate my simple point: We don't have a fuel discounter in town, it would seem because of that, we pay more than adjacent towns.

Now, if you wish to promote the idea that while we pay a bit more for our fuel, our groceries might be cheaper, then lets see some examples. It is a plausible idea.

[Andy Capp]

Err, could you explain that one?

Banking.