According to Yahoo! News, oil prices closed at US$126.77 per barrel yesterday, down almost $20 from July 11 record high prices of US$147.50 per barrel.
If you do the maths, that’s about a 14% in falling costs for petrol. A few weeks ago, I saw petrol prices in Sydney go up to about AU$1.68 a litre and last Tuesday, I saw petrol prices were around AU$1.49. Tuesday is meant to be the “cheap fuel day” here.
Now if you do the maths again, that’s about a 11.3% in price reduction, which is inconsistent with the 14% fall in barrel costs.
I’m not entirely sure if my assumptions in calculations are right, but why aren’t the prices fluctuating proportionately?
Are the major oil companies pocketing big time from the large fluctuations in petrol prices due to supply and demand? Well according to The Age, British energy giant BP announced a net profit of US9.47 billion in the second quarter, up 28 percent.
So yes, I’d probably say so. If you somehow find a “black gold” mine, please let me know as I’d be interested in investing in it.