Quote:
Originally Posted by Steamdrivenandy
In economic theory lack of demand should lead to businesses cutting prices to sell stock. Trouble is that if the margin is tight then there is no room for a price cut. Unless you're in urgent need of cash to fund borrowing then there's no point at selling at a loss.
A large part of fuel prices are tax and the retail seller has a very small profit margin, which even if cut would make little difference to the end price.
Supplies are purchased from enormous companies who buy in crude oil and process it. To get a significant reduction in price requires them to reduce margins or force crude oil producers to accept lower prices. Producers need income and demand is reducing, partly because of Covid, so they are holding out for higher prices to keep overall income up.
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Last year during lockdown fuel prices fell. This lockdown they do not seem to have fallen, are there more people buying fuel this lock down?
macafee2