UK Gasoline Prices Hit Fresh Record High

Platts Podcast, Jan 6, 2011
Simon Thorne, editorial director for Platts EMEA oil, and Daniel Colover, light ends editor for Platts EMEA oil, discuss UK gasoline prices, which hit a fresh record high of 127.21 pence/liter or $7.51/gallon on January 5, focusing on the impact of a rise in both fuel duty and value-added tax, which came through at the start of the year. [Prices for gasoline in the UK are amongst the highest in the world.]

(Israel’s gasoline prices also are among the highest in the world. The 43-agorot-a-liter hike that went into effect this week (Jan 2) brought the price of gas up to NIS 7.14 (c. $2) for a single liter of 95-octane unleaded gas, or $7.57/gallon. Five elements determine the price consumers in Israel pay for a liter of gasoline at the gasoline service stations: (1) refinery gate price, i.e., CIF LAVERA trade prices for fuels in the Mediterranean Basin, actually reflecting changes in the price of crude oil, (2) distribution and marketing costs and profits, (3) an excise tax, (4) a value added tax---VAT, and (5) insurance, leakage, inventory costs, etc. Gas is purchased---CIF LAVERA---by fuel distribution companies for NIS 2.3092 per liter, accounting for 32% of the total price. About 10% is tagged on for marketing, i.e., the profit-margin for the fuel companies, or NIS 0.70 of the total NIS 7.14 per liter. Then there is an excise tax, called "Blo," fixed by the Ministry of Finance, of  NIS 3.09 per liter, constituting 43% of the total price. The government takes another NIS 0.98 or some 14% as VAT. And finally NIS 0.06 per liter or about 1% of the total, goes to inventory costs, etc. -- D.R.)