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« on: 07 January 2015, 12:43:10 pm »
Its not quite that straight forward. One barrel of oil is about 35 gallons. From that, about 120 litres or diesel and petrol is refined. The rest becomes other things like aviation fuel, other oils etc so for a $50 barrel, the cost of the bit that gets turned into road fuel is about $37.50 making the raw materal cost about $0.31 / litre or £0.20 in real money.
Add in fuel duty at about 60p/l and the cost before refining, distribution and profit is £0.80/litre. Add VAT, and the 1p/litre the retailer gets (yes that is why they hate the gits that drive off without paying) and the price becomes £0.96/litre
Add in the refining and distribution costs and I doubt we will see petrol or diesel ever fall below £1 per litre again unless HMRC drastically reduce their duty rates.