The other day someone, on that page, commented on the price of fuel in the local filling stations. They weren't really complaining about the high price of petrol but more about the price fluctuations between different garages and even in the same filling station.
I thought it might be an interesting blog - why and how the price varies. As I started to investigate I found the information both complicated and contradictory. In fact I decided that to do it properly would be both boring and long. That didn't stop me though. So, if you continue, expect boring and long. And sometimes, simply because of the complexity, I've oversimplified. There is also a lot of imprecision in my use of petrol stations, garages, petrol and the like. I'm sure you know what I mean - gasolineras and carburantes.
The cost of petrol and diesel at the pumps is based on several factors such as the cost of the crude oil, the refining costs, other on costs including additives, transport, the distribution network, payments to intermediaries, tax and, of course, profit margins. Some of those costs are unpredictable, for instance the cost of the crude is subject to international fluctuations based on big news, things like war, changes in government or how OPEC increase or decrease the flow of oil to suit their own ends. At the Spanish pumps about a half of the cost of a litre of diesel is taxes, for petrol it's about 55%. At the moment, and until the end of the year, there is a 20c discount on each litre of fuel funded, in the main by government, presumably from the tax income, and partly from the petrol companies.
The fuel price varies from day to day because someone, somewhere in the organisation that runs or provides fuel to the filling stations, is keeping an eye on all those factors so they can provide a guide price to "their" petrol stations. The time that each group notifies the new price varies from group to group but most tend to do it once a day in the morning. A few years ago some of the big providers were taken to court, and lost, for price fixing between them. Presumably they no longer do that. Nonetheless the prices in the stations of the major brands, those with similar characteristics at least, are still remarkably similar. Geography and competition are an important part of deciding on the price at the pumps. Pinoso, as an example has two (obvious) petrol stations whereas, in Elda, the entrance to the town has at least six or seven very closely grouped - more competition, lower prices. Fuel nearly always costs more in rural areas than built up ones. There is an exception to that, rural co-ops provide some of the cheapest fuel in Spain but that's because profit is only one of their concerns.
The price of crude oil on the world market is given in dollars. Exchange rates mean that even if the price of oil was steady over several days, or even weeks, the price would still vary because of the currency markets. Anyone with a pension paid in Pounds and turned into Euros will be aware how big those variations can be. The price of refining the crude oil also varies between the different refiners because, just like any other business, they try to decide how to maximise their profits while maintaining an adequate market share.
The refiners typically turn only 11% of the crude oil into petrol. It takes 2.5 litres of crude to make a litre of petrol. As a barrel contains 159 litres all it takes is a bit of simple arithmetic to get to the cost, to the refiners, of each litre of petrol. That's petrol as petrol but as the most basic product. Stored in tanks, and still a long way from the pumps, it is, nonetheless, the starting point for the retail price in all Spanish petrol stations. The big wholesalers are Repsol, Cepsa and BP. I think, though the information here was contradictory, that their refineries produce all of the petrol and diesel sold in Spain. There are, though, other firms like DISA and Galp, which are important distributors and it's possible that they import petrol from overseas.
Unless you're very rich you will have noticed that fuel costs more or less at different petrol stations. For years there was a state monopoly on fuel in Spain, the name of the monopoly was Campsa. When the monopoly was dissolved it's various parts went to Repsol, Cepsa and BP. Repsol now owns the brand name. These traditional brands cost more than less recognisable, often low cost, brands. Cut price petrol, the lo-cost stations, are a reasonably recent phenomenon in Spain. Nowadays they are pretty common in urban areas.
Lots of Spaniards don't trust cheaper petrol. They think it's an inferior, and possibly harmful, product. One of the biggest talking points in that mistrust is additives. All of the big chains say that they have some magic ingredient which makes the car engine run more efficiently. The idea is that the low cost garages don't add these things and that the additives are responsible for most of the price difference. In fact nearly all the lo-cost providers sell petrol with generic additives with similar characteristics to the premium retailers so the fuels are very similar. What is different is that not all petrol stations are as good as others. Some maintain their filters and tank cleanliness better than others for a range of reasons. It's also broadly true that the majority of the lo-cost petrol stations are pretty basic; they don't have attended service or, if they do, there is only one person, there is no shop and they are in places where site rents and the like are lower so their operating overheads are lower. Probably though the real reason that the cheap stations are cheaper is that they are working on the original thinking behind supermarkets - pile it high and sell it cheap. Reduced profit margin but increased profits.
So, like almost everything in a capitalist economy, the advice is to shop around.
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