Every cloud has a silver lining.

From Energy Newsline:

British drivers that took the plunge to go green and pick up an electric vehicle (EV) may now bear the brunt of sky-high energy prices from October.

Ofgem’s announcement that the price cap will rise to £3,459 will be reflected in the cost of driving an EV, with the price of electricity almost doubling from 28p per KWh to 52p. This is while petrol prices have dropped in recent weeks to an average of £1.70 per litre.

A study by the RAC has revealed the differences of running an EV with its petrol equivalent in a new study. Drivers of a Jaguar i-Pace – the company’s electric SUV model – would expect to pay £99 more to travel the same distance as the petrol version; a Jaguar f-Pace.

E5 v E10 petrol

I was advised to put only E5/super in the 1996 Honda Del Sol, which costs £1.60/litre as against about £1.45/l for the homeopathic E10 stuff.

No big deal really. I get at least 10% more miles per gallon out of the E5/super than I used to do out of the E5/normal (which is no longer available at local petrol stations), and an unknown amount more than if I used E10 (which I don't dare), so in terms of pence-per-mile, it comes out about the same.

I suspect that the whole thing is just greenwashing by the car manufacturers to trick us into buying new cars.

Bonus conspiracy theory - the fuel shortages/panic buying that we had at the end of September was triggered by the switch from E5 to E10.

"Was the switch to green fuel behind the petrol crisis?"

Asks The Daily Mail:

Retailers have blamed the spiralling petrol crisis on the government's switchover to greener fuel. Industry leaders said they had been 'emptying their tanks as fast as we could' ahead of the rollout - which left them short during the recent panic buying. They demanded an inquiry into the forecourt chaos that has left pumps dry across the country...

Crowd behavious is unpredictable and something must have triggered it somehow, so it's not implausible. Like people who are trampled to death in stampedes at open air gatherings, there must have been a first person who pushed too hard or tried to squeeze in where they didn't fit.

However, in answer to the question, I think on balance "no", because the timeline doesn't fit. E10 was introduced on 1 September and we (i.e. I and all the other motorists in the queues on 24 September) first saw reports of shortages the day before, i.e. 23 September, so that's a three-week gap, in which time surely the petrol stations would have handled the transition.

"Fuel issues persist in south but 'over' elsewhere"

Says the BBC.

That's hardly surprising. We in the South East are the most inconsiderate and irrational people in England, from which I do not exclude myself :-)

I think I beat The Daily Mash by a few hours.

I misunderstood the first headline

From The Dail Mail, via MSN:

Minister calls petrol crisis a lesson in abandoning fossil fuels

I initially thought that somebody had seen sense and admitted that the petrol crisis is a good lesson in the futility and nigh-impossibility of abandoning fossil fuels, but I was sorely disappointed:

Environment minister Zac Goldsmith has said the ongoing petrol crisis is a 'good lesson' in the need for the dependence on fossil fuels to end.

But hopefully I haven't misunderstood the second headline, hinting that IDS actually cares about welfare recipients::

Ex-Tory leader Sir Iain Duncan Smith launches a last ditch attempt to save £20-a-week Universal Credit uplift as he urges Boris Johnson to keep the extra cash in place over the winter.

Go IDS! If they want to cut the welfare bill, the first priority must be to phase out Housing Benefit for private tenants.

[Famous people] being hit by [stuff]

A double-whammy today!

From the BBC:

Pop superstar Shakira says she was the victim of a random attack by a pair of wild boars while walking in a park in Barcelona with her eight-year-old son. The Colombian singer said the animals attacked her, before seizing her bag and retreating with it into the woods...

And from The Express:

Former Brexit Party leader Nigel Farage has said he was hit by a van during a desperate search for petrol on Thursday. The Brexit campaigner slated the Government's handling of the UK's ongoing petrol crisis in a furious tweet. Mr Farage raged:

"The Government tell us that the fuel crisis is easing. I went to 7 petrol stations this morning and there was no fuel at any of them. Was then hit by a van whilst stationary at a roundabout. Great start to the day!"

The long-suffering Nigel also survived a botched plane landing a while back, I'm guessing that was far worse, although it's still pretty upsetting when a twat drives into you.

And I don't know why he had to go to seven petrol stations. I picked up the MR2 from its MOT today and got petrol at my nearest petrol station, queue was 45 minutes, but all very-well mannered and I wasn't in a hurry.

"First signs of stabilisation in fuel supply crisis"

Reports Sky News.

The whole thing is an absolutely fascinating example of irrational human behaviour. Being a natural born trouble maker with a bit of spare time, I queued twice over the weekend to unnecessarily fill up two of my cars -  I would have done the third one but I noticed the MOT had expired (it's gone in today). It made me all nostalgic for the 1970s or East Germany.

There is a whole branch of applied maths for Queueing Theory, and no doubt they'll be analysing the heck of out this for years to come.

I always assumed that it would sort itself out within a week or so. On average (say), motorists fill up every two weeks, a petrol station can handle three times its normal volume and everybody bunches and fills their cars over a five day period (14 ÷ 3, rounded). Then theoretically for the next nine days (14 - 5), very few people need to or will bother filling up at all.

Except heavy users, they have no choice. And people who are would rather fill up again even if the tank is three-quarters full, which are unknown unknowns. The effect will be minor - while people just topping up spend much the same amount of time in the queue, at the pump, faffing about in their cars before driving off (what the heck are they doing?) and manoeuvring their way back into the traffic they are only buying smaller amounts of fuel per visit, so total fuel sold per petrol station per day is the same (more customers x smaller volumes).

Maybe we will reach a steady state where everybody tops up a quarter tank every three or four days, which is the same amount of fuel purchased, just more time in longer queues? Which will dwindle to every week, and hence to every fortnight again.

I don't know how this will pan out, but it is very interesting.

Project Fear, Part the Manieth?

This appeared in Facebook:

On the face of it, it seems logical. Our oil refineries are going to be clobbered on the petrol they export to the EU, at the same time as they are going to be undercut by tariff free foreign imports. This will lead to the closure of oil refineries, strike action, fuel shortages, riots, famine, pestilence and the usual End Of Life As We Know It.

However, no mention is made of the following:

All the crude oil we import is from outside the EU, although just under half is from Norway, which is quasi-EU. Just over half of this at least will become significantly cheaper. (That is assuming that the crude oil from Norway is already significantly cheaper than that from non-EU countries, which is not necessarily the case. Market economics suggest that the Norwegians would charge just slightly less than what we pay for oil from non-EU countries.) This would make it more economical to continue to refine our own fuel rather than to import it ready refined.

We import more petrol than we export and we export more than we consume domestically. (From Google: UK fuel consumption is 1.475 Bn litres a month, which translates to 1.062 M tonnes a month. UK fuel exports are 30 M tonnes a year). So it appears that 100% of those petrol exports that are going to become uncompetitive are actually imported, so the margin on the exported fuel cannot be great or the EU countries that currently import from us could simply buy direct from our suppliers and cut out the middleman.

I may be wrong about this, but this, and, by extension, the entire Yellowhammer report, looks like just another manifestation of Project Fear.

Why banning diesel makes no economic sense.

I don't claim to understand fully the various steps in this train of thought, and I doubt that there's anybody who understands all of them fully, but here goes…

Science

Crude oil is a mixture of various different types of hydrocarbon molecules. The smallest/lightest are CH4 (methane gas), there is no precise chemical formula for petrol, which "constitutes the largest fraction of product obtained per barrel of crude oil. The hydrocarbons in gasoline have a chain length of between 4 and 12 carbons." Next is diesel, which "consists of hydrocarbons of a chain length between eight and 21 carbon atoms", and so on, all the way down to the heavy stuff used for heating oil

Heating oil "is one of the “left-over” products of crude refining. It is often less pure than other refined products, containing a broader range of hydrocarbons. Because of its contaminants, fuel oil has a high flash point and is more prone to autoignition. It also produces more pollutants when burned."

Technology

There are different methods of splitting up crude oil into its constituent parts, known as refining, which in turn means a combination of distilling, fractionating and cracking, different kinds of crude oil have different mixes of the various kinds of hydrocarbon atom and different methods of refining produce different results etc.

But by and large, for every three or four litres of petrol, you get one litre of diesel.

The environment

As a rule of thumb, the lighter the original molecules, the cleaner the stuff burns, so methane burns away to CO2 (carbon dioxide) and H20 (water) which are more or less harmless and the heavier stuff like heating oil churns out the most soot. Diesel molecules are heavier than petrol molecules, so generate more soot or 'particulates' in the modern jargon, which is unhealthy to breathe in as is widely documented.

The Kuznets Curve

Initially, new industrial processes tend to be very polluting. The polluters don't care and governments in developing countries are loath to tax pollution because economic progress always comes first. With the benefit of hindsight, the UK was a developing country for these purposes until fifty years ago; having got a fair bit of industrialisation behind it, PR China is now at the cusp where the population are starting to care more about air quality than just economic growth (the Kuznets Curve).

Taxes on pollution

We would therefore expect the tax on diesel to be higher than on petrol. As a result of a complete policy foul-up, diesel duty used to be lower than fuel duty in the UK, but once they realised that they had messed up the rates were aligned (it's a tax on road use rather than a tax on pollution). Interestingly, in Germany, apparently because of the haulage and farming lobby, diesel duty is lower and diesel is about twenty percent cheaper than petrol.

Capitalism and waste

Initially, factories and oil extractors don't care about recycling or minimising waste. As the economy grows, raw materials become more scarce and labour and power become more expensive. As technology develops, people find ways of reducing waste or putting by-products to some sort of productive use.

A few examples: the average miles per gallon of cars on the road has doubled over the past fifty years and the life expectancy of cars has doubled too. Bauxite is plentiful, but it takes huge amounts of electricity to turn it into aluminium, so recycling rates for aluminium are approaching 100% in developed countries (melting down cans for re-use uses one-tenth as much electricity as refining bauxite). Even two-thirds of steel is recycled. When trees were plentiful, sawdust was just discarded or burned; nowadays, a lot of it is used to make chipboard or mdf, which is a higher value use than just burning it for heat, and so on.

Efficient use of by-products

So what would happen if everybody got a 'conscience' and deciding to switch from diesel to petrol, assuming they don't want to run their cars on vegetable oil (there isn't enough to that to go round anyway)?

That would push up the price of petrol and mean that a larger amount of crude oil has to be refined, but they would still be left over with one part diesel for every three or four parts petrol.

Having gone to all that bother extracting and refining, it makes no sense to throw the diesel away. So the price of diesel would fall relative to petrol and some people would then ignore their 'conscience' and stay with diesel anyway, thus restoring the three- or four-to-one ratio between petrol and diesel use.

The economy is dynamic

There are no wild swings in the relative price and quantity of diesel vs petrol, because it is a dynamic process where the two opposing effects constantly cancel each other out.

Taxes on pollution (2)

To a large extent, it is futile taxing diesel more heavily than petrol even though the usual suspects are crying out for it. The tax is borne by the end consumer and assuming the end consumer is prepared to pay roughly the same for either, if petrol duty is cut and diesel duty increased, all that means is that the pre-tax price of petrol will increase relative to the pre-tax price of diesel by an equal and opposite amount to the tax differential.

The German example mentioned above runs slightly counter to this. The article explains that the pump price saving is largely cancelled out by the fact that diesel cars are more expensive to buy and the annual road tax is higher, maybe chuck in the fact that most people prefer petrol engines.

... cheaper than water

Ah, I fondly remember the good old days of last year, with shock horror headlines like this...

Channel 4 Dispatches find supermarkets selling beer cheaper than water

Today they were clobbering us with this...

Milk cheaper than water: supermarket price war drives down price of a pint

Supermarket price wars have pushed the price of four-pinter milk below that of some bottled waters...

When bought in a four-pint bottle, the price per litre of milk has dipped to 43p, compared to 44p for bottled still water.

If you do the numbers, the pump price (excluding tax) of a litre of petrol is considerably lower, at 32p per litre.

... which all reminds me of the 1985 film Water, the key scene is when Michael Caine has to explain to the disappointed islanders that they can actually sell 'table water' for a far higher price than they could sell the crude oil they were hoping to find.

What goes around comes around, eh?

George Osborne: Knows sweet FA about how prices are set

From The Daily Mail:

The Chancellor insisted it was ‘vital [that the fall in the price of crude oil] was passed on to families at petrol pumps, through utility bills and air fares’.

‘The Government is conducting studies of industries like the utilities and the airlines. We are examining if any action needs to be taken,’ a Treasury spokesman said.

How much the price of a) petrol, b) domestic energy bills and c) air fares fall when oil prices fall are three entirely separate topics.

a) Petrol is the easiest. The market is highly competitive, and falls in the price of oil are passed on in lower prices almost immediately (even though demand is fairly price-insensitive).

In round figures

July 2014

Pump price £1.32, knock off VAT = £1.10, knock off 59p fuel duty and 10p profit margin for the transporters/retailers = residual cost of actual oil = 41p/litre.

Crude oil $110/barrel, convert to £ at 1.70, divide by 159 litres = 41p/litre.

January 2015

Pump price £1.10, knock off VAT = £0.91, knock off 59p fuel duty and 10p profit margin = residual cost of oil = 22p/litre.

Crude oil $55/barrel, convert to £ at 1.55, divide by 159 litres = 22p/litre.

b) With domestic energy, it is nigh impossible to calculate by how much prices will fall for umpteen reasons which have nothing to do with the price of oil. Generators also use coal, gas and nuclear; generators and customers are locked into various fixed price contracts, there is little ease of substitution etc, so let's not bother.

UPDATE: VFTS in the comments reminds us that according to Energy UK, only 1% of UK electricity is generated from oil. i.e. in practical terms none at all.

c) Air fares are set according to what the market will bear.

This bears very little relation to costs in the short or even medium term. Some flights are run at a loss because the airlines don't want to forfeit their landing rights (they hope that things will pick up in future); some flights are hugely profitable.

International travellers will pay a lot more to land at a London airport than elsewhere in the UK, even though the total distance flown is much the same, etc. UK travellers have to pay a lot more to fly to a major European city rather than somewhere in the back of beyond.*

If this were not the case, then landing slots at London airports would not be bought and sold for such huge amounts of money. What the purchaser is paying for is the scarcity-monopoly-rental value. Airlines just try to sell as many tickets as possible for the highest price possible using a variety of auction methods (i.e. trial and error).

So the overall impact on air fares will be minimal, although we would expect a modest reduction overall; it will be negligible at London airports and larger at regional airports which are running at two-thirds capacity on average.

* Thanks to the miracle that is the internet, we can quickly establish that flights from Leeds-Bradford to Geneva start from £86 (British Airways); a similar distance flight from Heathrow to Munich starts from £141 (also British Airways).

"Danny Alexander to call for fuel price cut"

From the BBC:

Major petrol and diesel distributors are to be called on by Chief Secretary to the Treasury Danny Alexander to drop their prices further in light of recent declines in the cost of oil…

"The public have a suspicion that when the price of oil rises, pump prices go up like a rocket. But when the price of oil falls, pump prices drift down like a feather."

While no research supports this, the thought of this effect creates ill feeling, he will say.

To their credit, the BBC give comparative figures for then and now, as follows:

Oil/barrel (159 litres) - $115, $84
$ per £ - 1.72, 1.60
Pump price/litre - £1.36, £1.24

So in GBP terms, one litre of crude oil cost 42p in June 2014 and 33p now, a drop of 9p. Pump prices should fall by 20% more than that = 10.8p. Prices have actually fallen by 12p.

But the Ginger Rodent is addressing the "Highlands & Islands Branch of The Energy Institute". From personal observation, pump prices appear to be inversely proportional to population density*, so quite possibly people in the Highland and Islands are seeing smaller price falls**?

* Because of (in no particular order) higher transport costs; smaller rural garages having to spread the same fixed costs over smaller sales volume; there being fewer competitors. It's quite bizarre. We drove along a five mile stretch of road out of London last Saturday, petrol is £1.20 a litre at one end and £1.26 at the other.

** Richard T in the comments confirms: "If you travel north on the A9 beyond Inverness, you will notice that by some magic of the fuel market, petrol and diesel suddenly become up to 10p a litre dearer once the Dornoch Firth is crossed."

Fun Online Polls: Choosing where to buy petrol & Syria

The results to last week's Fun Online Poll were as follows:

What factors do you take into account when deciding where to buy petrol or diesel?

Price and convenience - 54%
Price alone - 23%
Convenience alone - 9%
The brand. Some brands are better than others - 8%
Other, please specify - 5%

Two respondents speficially mentioned Shell VPower. Lola (who ought to know about this stuff, being a hobby racing driver and everything) said that it "is very good indeed" and StevenL said he buys it "every couple of months in case the additives actually do anything".

I go for price-and-convenience myself, glad to see I'm in the majority again.
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About a million words have been written about what we should or shouldn't do about Syria.

I have no particular insight or knowledge about that particular country and have nothing to add to the debate, but I do know that there is a general rule that invading or attacking countries is nearly always counter-productive. You have to be really, really bloody sure about the outcome before you even think about doing so. Or at least really sure about what will happen if you don't attack.

But your opinion's as good as mine.

Vote here or use the widget in the sidebar.

Fun Online Polls: What's the worst kind of monger and how you choose petrol

The responses to last week's Fun Online Poll were as follows:

What's the worst kind of monger?

Fish - 6%
Iron - 3%
Rumour - 13%
War - 37%
I think we know the answer to that one - 41%

The poll refers to a proposed radio phone-in in Alan Partridge: Alpha Papa which he decides not to bother with, stating glibly "I think we know the answer to that one", so 41% of you got the right answer, possible inadvertently (or has everybody seen the film?)
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While we were driving round on holiday the last few days, we kept our eye out for petrol prices along the way and filled up where it seemed cheapest.

My son, 12, made the observation that prices seem to go up the further out of town you are, which appears to be true.

A petrol station in or near town sells a lot of petrol so can spread its fixed costs over more units and it competes with other petrol stations in the area. An isolated petrol station in the middle of nowhere sells much less petrol so has higher fixed costs per litre sold and it also has a captive audience. If you are in the middle of nowhere and you're running out, then you'll pay the extra few pence per litre whether you like it or not.

A petrol station on the motorway services has the best of both worlds - huge sales to a massive captive audience (assuming few people take the time and trouble to go online before their journey, work out which cheaper 'local' petrol stations are close to motorway junctions and then go and seek them out) which is why the rent for such a petrol station is sky-high.

I also noticed a lot of advertising saying that "Our fuel is better than other fuel because..." and then some techno-babble which is probably about as rooted in hard science as your average shampoo advertisement.

So that's the topic for this week's Fun Online Poll, does anybody actually prefer one brand of petrol on the basis of its perceived superiority? Or do we just go for price and/or convenience?

Vote here or use the widget in the side bar.

Blame Diversion auf der Autobahn

From The Independent

Motorway service stations could soon be shamed into lowering their petrol prices after criticism that they are fleecing drivers by charging 10p a litre more than other garages.
The inflated cost of motorway petrol is among the most common complaints of Britain’s drivers(1). At the moment, most motorists only discover they are having to pay over the odds once they have pulled off the motorway(2). Now the Government may force service stations to advertise their prices well before drivers reach the site.
...
One proposal is to include details of prices on road signs giving the distance to the nearest service stations, which happens in France. Signs on the hard shoulder could also display the prices at the next few motorway stops, enabling motorists to compare prices. The Government’s aim is to drive down by prices by forcing petrol retailers to be more competitive.(3)
...
Last night the RAC welcomed Mr Cameron’s proposal. Pete Williams, a spokesman, said: “Motorway drivers have long been the victims of some pretty indefensible(3) pricing at the pumps with many service stations charging on average 10p extra per litre above the ‘high-street’ or supermarket forecourt price(4).

1. Who? Who's complaining. I'm not. I know they charge more. It's a premium location, like having a cafe on St Marks Square or the Champs-Elysee. I go elsewhere. If I'm desperate, I stick a couple of gallons in - a couple of extra quid for the odd time I do that is the least of my concerns.

2. It doesn't take many times pulling off the motorway to discover that service stations charge more for everything.

3. The differential is even greater in France than here, in my experience.

4. But you're not at the supermarket. The petrol stations close to J15 and J16 of the M4 are two of the most expensive in Swindon.

What also isn't mentioned is there's a quid pro quo of service stations. If you like, a form of taxation, that the high street and supermarket stations don't have to pay, and that is that the parking and toilet facilities are for everyone. You can pull up, have a pee, open up your sarnies and flask of tea and eat your lunch and drive on. Your local BP garage may have a different outlook on this. In a roundabout way, that's the government extracting some rent for a premium location.

Of course, this is all part of the desperate blame-diversion by government, that the reason people are suffering are a few greedy companies, when in reality, most of us are getting stiffed far more paying for useless windmills than what we pay for service stations.

"Oil company executives say UK petrol market is working well"

From the BBC:

A study of the UK petrol and diesel market by BP and Shell has said little action is needed.

"The evidence we gathered suggests that at a national level, competition is working well in the UK road fuel sector," its report said. It found the UK has some of Europe's cheapest fuel prices before tax.

It said there was very little evidence that executive salaries rise quickly when oil prices go up, but are slow to fall when prices drop.

"We recognise that there has been widespread mistrust in how this market is operating and how our bonuses are calculated," said Shell's chief executive Peter Voser "However, our analysis suggests that competition is working well, and rises in pump prices over last decade or so have largely been down to increases in tax and the cost of crude oil."

But they found that fuel was significantly more expensive at service stations and was concerned that motorists were not able to see the prices until they had left the motorway.

"It's called a captive market." added BP chief executive Bob Dudley "If you want to fill up on the motorway, there's really nowhere else for you to go. Our prices simply reflect that."

Fun Online Polls: Superfoods and Superfoulups

I'm glad to see that nearly everybody else is as much in the dark on these as I am. The results to last week's Fun Online Poll are as follows:

Which is your favourite superfood?

Acai berries - 1%
Chia - 1%
Goji berries - 2%
Kombucha - 1%
Wheatgrass - 1%
Other, please specify - 18%
I've never of any heard of those, much less eaten one. - 75%

The most nominated superfood in the 'other' category was bacon (including Parma ham, same sort of principle). I have to agree with that.
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I normally start a new poll on a Monday, I'm a bit late this week because I wanted to see if there'd be any more Lib-Con superfoulups to add to this week's list, choose your favourite(s) Here or use the widget in the sidebar.

Is it just me..?

From the BBC:

A fire service spokesman said: "Her daughter asked her mum for petrol because she had run out. The [gas] cooker was on and the fumes ignited."

Station manager Lee Smith, whose Acomb crew attended the fire, said: "The people were cooking their tea and dispensing petrol from a container to a glass jug. The vapour then ignited, the jug was then spilt which obviously ignited as well and the person involved in the decanting was consumed by the flames. Her daughter phoned 999 and was obviously extremely distressed."

"VAT on pasties threat: No 10 denies causing panic"

From the BBC:

Downing Street has dismissed claims it caused "panic" over the threatened imposition of VAT on hot pasties by urging Greggs customers to make "contingency plans" such as filling up.

Labour described the comments as the "height of irresponsibility" for giving the impression people should panic buy. But No 10 said it had alerted customers to the consultation period in "a calm-headed and sensible way".

The civil contingencies committee Cobra* will meet later to discuss plans in the event of a strike by angy bakers.

* Sigh. 'Cobra' is the name of the room in which they meet (Cabinet Office Briefing Room A). The committee itself is just the 'Civil Contingencies Committee'.