Tuesday, April 29, 2008

Supply and demand makes petrol hits £5 gallon after Grangemouth strike.

The simple law of supply and demand has seen petrol hit £5 a gallon here in the UK. Consumer groups have predicted up to six weeks of price rises because of the disruption and accused the Government and oil firms of "cashing in" on the increased revenue generated by rising prices. The rate of the increase in price is now double what it was last week and the highest the UK has seen for three years, with the average price of unleaded petrol at 109.77p yesterday - or £4.99 a gallon - and 119.77p for diesel.

People have panic bought fuel so that their vehicles would not run dry. People have not taken advantage of how large their fuel tanks are and used the mileage range that is possible to delay their purchase of fuel until after the striking workers return to work. The petrol filling station owners have used this demand to increase their profit margins and cash in on the situation. This is the simple law of supply and demand in action. The public's selfishness has caused this avoidable increase in the price of petrol and diesel, while our government and the petrol companies cash in on this demand. When will the public learn these simple economics? Never - because of the public's love of the private motor car.

Use your head motorists, use the range of your fuel tanks and buy when the price is a little lower. If some of your journey's can be delayed for another day when the fuel could be cheaper, then wait. Do not top-up your fuel tank in case there is a hiccup in the supply chain. David Jones never lets his car petrol tank gauge fall below half - just in case - it is his attitude that let's the petrol filling stations cash-in and everyone else ends up paying more than they should for their petrol.
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