Selling and buying petrol

Pinoso has lots of community websites. The English language one I tend to look at most often is a Facebook page called Pinoso Community. People use it for a whole range of things from lost dogs and questions about where to find services to checking to see if anyone else is having trouble with their Internet provider or power supply.

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.

Running on fumes

Coming home from Torrevieja on Saturday night the fuel warning light came on on the car. Seventy kilometres of fuel left. Fair enough, we were near the coast, which is pretty built up, and we were on a motorway where there were service stations before our turn off.

Even though the sign on the road said the services were open from 0 hrs. to 24 hrs it was obvious, as we pulled onto the forecourt, that the garage was closed. The pump had a bank card payment facility but it wasn't working. Error message - software failure.

Whilst I dithered about what to do next a man, who had been shouting into his mobile phone in a rather disconcerting way, came over and asked if he could use my phone. His accent was a bit working bloke and it took us a while to tune in to his accent and forthright style. Basically, his car was old and it had lost all its lights. He was unable to continue his journey back to Albacete, about 170kms away, with his wife and kids on board. He'd been trying to phone his insurance company to get either a mechanic or a tow truck but his phone was refusing to work with the 902 number. 902 numbers are those non geographic numbers used by companies and organisations so you don't know where you're phoning - like the 0345 numbers in the UK. They are sometimes not included in call packages. On mobile phones especially they can end up adding a lot to your bill, or eating up your pay as you go credit, as you listen to tiddly pom music, get told about busy operators and how important your call is.

I suspected some sort of ruse from Mr Albacete so, rather than handing over my phone and him running off with it or surreptitiously phoning a sex line in Rwanda, I let him use the hands free inside the car. In the end it turned out to be an absolutely genuine call from a man having a much worse evening than us. As we drove away, he asked that God be kind to us for our generosity.

The Almighty didn't seem to be on hand to help with the fuel problem though. Petrol stations in Spain tend to close at 10pm. There used to be ones with night windows, there may still be, but I suspect that nowadays the tendency is to have a card reader instead. It's been a while since I last needed to refuel at night. We're old you know. We stay at home with cocoa.

We were closeish to Elche and I know that city well enough to know the location of quite a few petrol stations. Big petrol stations. The one in the supermarket said 24 hrs. on the sign. The card reader said it couldn't read my card. The second was closed, the third was behind a system of labyrinthine one way roads that had us going round in circles for ten to fifteen minutes before I gave up. We drove to an industrial estate with more petrol stations. The dashboard display now said we were good for only another 15 kms. I presume the system tends to pessimism but it was, nonetheless, a little worrying. Another big and busy Repsol station was closed as we passed but there were lights on at one of the cheap garages on a service road. And the pump was happy to accept my credit card.

The usual system with credit card pumps, when you want a full tank, is to tap in a higher figure than the value of fuel you expect to need. When you're done the credit card and pump talk to each other and refund the difference. My receipt says something like 70€ credit, 48,33€ served. Just what I'd expect. At the moment though my credit card account shows that I paid 118,33€ for the fuel. I'm sure the refund will come but somehow it seemed like the perfect end to a simple and routine journey home.

Pumping gas

When I had my first cars in the UK, when you could get five gallons of cut price Jet petrol for a pound, there was always someone to serve you. By the time I left I bought fuel in supermarkets and you served yourself. Not so in Spain. When we first arrived nearly all the petrol stations had attended service. I never particularly cared for it. I'm one of those trainspotter type people who keeps records; I like to know how many litres of fuel per 100 kilometres the car is using. The blokes and blokesss at the filling station tend to stop on a round figure's worth of fuel. I suppose it was a habit from the times when people paid with cash. Less change to faff with. Petrol pumps that turn off automatically, as the liquid backs up the hose, and change conscious pump attendants played havoc with my number crunching. There was another reason for my dislike of attended service. Pull up at self service, pump your own fuel, pay with a credit card and the amount of language required would be within the grasp of your average Homus Erectus. Attended service, on the other hand, requires substantial human interaction and language skills.

There wasn't a lot of choice in petrol stations back then either. You could go to Campsa, Repsol or Cepsa stations. Campsa was the name of the old state company and the name belonged to Repsol by the time we got here so the fuel was Repsol too. Those two companies also controlled most of the refinery capacity in Spain. There is and was a BP refinery at Castellon and I'm told there were BP petrol stations too though I'd be hard pressed to remember having ever seen one.

Out here in the fields, to quote the Who, we still generally get attended service though there are now fewer attended service stations than there used to be. Lots of stations have attended service hours and card machines for the rest of the time. My guess is that in the bigger, busier towns and cities it's nearly all self service though most of the stations still have someone to look after the shop or to sell coffee even if they don't have much to do with selling fuel. I've seen lots of complaints from people asking why they should have to pump their own fuel, especially in the stations with no staff at all. Moans along the lines of - is it safe?  - what about people with reduced mobility? etc. Some of the regional governments have even legislated against staffless filling stations on the grounds that they are safeguarding jobs. Ned Ludd is alive and well.

Nowadays there are more retailers though the choice is still quite limited; Galp, Petronor (which is actually Repsol) and Meroil are pretty common and there are occasional Shell and Agip stations. The big expansion though has been in the cut price suppliers. Cheaper fuel has been available in Spain for years now. At first the stations were few and far between and usually linked to supermarket chains but, now, they are everywhere. There's even one in Pinoso. Price differences are substantial. In the order of 12 to 15 cents per litre.

Spaniards tend to have shared views on things. Go swimming too soon after eating and you are going to sink. Drink hot drinks whilst you eat and expect health complications. Online shopping is risky. One of those certainties is that cheap fuel is poor fuel. The big brands, the known brands are safe but some unnamed fuel isn't. Some friends were assured by a main dealer that the reason the engine on their car packed up was because they habitually bought cut price diesel. When I've pointed out to Spaniards that all the petrol comes basically from the same refiners (Repsol, Cepsa and BP) their answer has been, as one, that the full price people put stuff into their petrol, that makes it good, whilst the cut price people don't, which is why it is bad. I've heard it so often that I half believe it and so I tend to fill up alternately with cheap and full price fuel. I never really believed it wholeheartedly though because I know that Spain is in Europe. I know that the EU puts controls on lots of things, amongst which, I'm sure, is fuel quality. If it says 95 octane then it's 95 octane, if it says Gasoleo A then it's proper diesel whether the stickers on the pumps say Bongofuel or Repsol.

Anyway, a couple of weeks ago as I accelerated the car onto the A31 the engine warning light came on and the power fizzled away. It wasn't a pleasant experience trying to get to the hard shoulder but the car fired up again and we got home. The chap who looks after the motor found a fault, a seal had gone on the hose into the turbocharger. He fixed it. Obviously he'd found the fault. But later the warning lamp lit up again. The second time I was in the middle of an overtaking manoeuvre. There was a lot of headlight flashing from drivers wondering why I had overtaken only to slow right down again. The mechanic had another go. He found clogged fuel filters. We had a conversation about fuel quality. He refused to be drawn on the question of cheap versus expensive fuel. He told me a story, a story that he stressed was only hearsay, about mislabelled fuel, cheap fuel sold as expensive fuel. I thought back to the day that the car first coughed. I'd been to a cheap fuel station.

Maybe I should be more careful about eating and swimming too!

'Til the only dry land were at Blackpool

I've been to some cold places in my life. England in January isn't that warm; the Isle of Lewis and Stockholm are often colder but they are not uncomfortable places. Culebrón on the other hand is uncomfortable. Very uncomfortable. Outside it's about 7ºC and it's midday. The house isn't set up for it. Wind whistles under the doors, through the windows. Marble and tiled surfaces don't help. Built for summer, not for winter. The only warm place in the house is under the shower. Outside, the sky is blue, the sun is shining. Wrapped up, with gloves it's warm enough. But inside the chill soaks through your bones. Down in La Unión I haven't yet started to close the windows at night or use a heater but here. Brrr!

Our local petrol station has no petrol, no diesel and no gas bottles. Everyone says that the owner can't pay his bills so the oil company won't deliver except for cash payments. The next nearest petrol stations are at least 10kms away. The car wash is still in business though. I used it today rather than plunge my hands into a bucket of cold water.

The local bodega on the other hand was doing a roaring trade on Sunday. I think, though I'm not sure, that the farmers who produce the grapes which make the wine, have a running account with the bodega shop. They buy things on tick against the money they are paid for the grapes they harvest. The shop sells groceries, things for around the farm, workwear etc. It's an interesting place.

In the Santa Catalina district of the town, one of the older and possibly poorer parts of Pinoso they are having a fiesta because it's her day on the 25th. I plain forgot to go to see the street bonfires on Friday evening. Yesterday I was going to go and watch the flower offering and have a look at the mediaeval market as I drove back from the cinema but I changed my mind when I noticed that the temperature was hovering around 2ºC and there was a chill wind blowing. What fun in drinking a micro brewery beer or eating a chorizo roll with hands frozen by the cold? I did pop in today though.

There's a circus in town. I half wondered about going. The camel and the strange long horned cow type beast parked outside the big top looked very mangy and very out of place. I arrived to take a few snaps just as the Sunday matinee crowd came out. There wasn't much of an audience.

I'm just back from lunch down in the village hall. It was the Neighbourhood Association AGM. We always have one of the local paellas with rabbit and snails and gazpacho, a sort of rabbit stew with a flat form of dumpling. It's always the same. The meal started late, there was applause when the metre and a half paella pan was brought into the hall from the outside kitchen where it has been cooked over wood. There was plenty of drink and the actual meeting was sparsely attended and very disorganised. For the first time ever, and despite being the only foreigner in the place, I didn't feel too lost. I laughed when I didn't understand and I voted knowing what I was voting for despite the chaos. It looks like we're off to Benidorm again in March. Everybody else was drinking the very fashionable gintonics (gin and tonic) but someone found a bottle of whisky for me. I drained it. My typing may have suffereed.

The title, by the way, is from three ha'pence a foot by Marriott Edgar. Snaps on the Picasa link at the top of the page.

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It rained and it rained for a fortni't, 

And flooded the 'ole countryside. 

It rained and it kept' on raining, 

'Til the Irwell were fifty mile wide.

The 'ouses were soon under water, 

And folks to the roof 'ad to climb. 

They said 'twas the rottenest summer 

That Bury 'ad 'ad for some time. 

The rain showed no sign of abating, 

And water rose hour by hour, 

'Til the only dry land were at Blackpool, 

And that were on top of the Tower.

Filling up

I try to avoid the single petrol station in Pinoso if I can. They aren't ever actually unpleasant but they are a bit offhand. The staff sort of vaguely ignore me or talk across me to another customer. It's common for them to beckon for my credit card rather than ask me for it. Their reasoning may be that very few of we Brits speak any Spanish so it's not worth trying to talk to us but, whatever the reason, I don't like their attitude much.

It's not a cheap petrol station either. The diesel cost 1.439€ per litre today and the price comparison sites says that if I'd hunted out the cheapest petrol station in the province I could have saved 13 centimos per litre and got it for 1.309€.

According to the reports if I want to save money I should avoid Galp or BP stations where prices tend to be the highest. Repsol stations, which are the most widespread, have widely variable prices and the best bet for lower prices are the independent brands including the hypermarkets or Cepsa, the second most common brand. There is a common belief in Spain though that cheap fuel from the independents isn't to be trusted because it lacks the essential additives of the big names.

Apparently if I really want to save money I should make sure that I tank up on a Monday with diesel in a hypermarket in the province of Huesca. Conversely I should avoid stations at weekends, especially just before a Bank Holiday and especially on motorways or in rural areas. It's a Bank Holiday in Alicante on Monday and of course Pinoso is a small rural town.

The Monday thing is interesting. The EU asks Member States to report fuel prices on Mondays and Spanish prices are habitually a couple of percentage points lower that day. The petrol companies say it's because demand is lower on Mondays so they drop their prices to attract more trade. Critics say they do it to make their prices seem more reasonable.

Most of the petrol stations in Alicante and Murcia still seem to be attended service. The last few times I've filled up before today it's been in a service station near Fuente Alamo in Murcia. The first time I went there I didn't see anyone on the forecourt wearing the distinctive blue and orange overalls, I looked for, but didn't find, one of the signs to say service was attended so I set about serving myself. The pump fired up OK but as the fuel began to flow and I stared vaguely into the distance I felt a hand close on mine. "How much do you want?" said the attendant as he gently, but firmly, relieved me of the nozzle.

The fuel market in Spain is controlled by three big firms. Repsol and Cepsa  have well over 55% of the total outlets between them with BP being the third big player. Nearly all the refining capacity is with the same companies so that even independent stations and hypermarkets are ultimately buying their fuel from one of the big three.

Most people believe that these three companies operate a form of price fixing policy by not really competing too hard with each other. Even the independently owned but company branded stations get a message everyday to suggest appropriate pump prices.

But cars won't run without the stuff and we can't all live in Huesca so we mutter gently but ultimately pay up.