Apparently now we have been ripped off by petrol companies ‘price-fixing’. Really? The only two things I find astonishing about this allegation are firstly that the whole thing didn’t come to prominence a lot earlier and secondly that anyone is surprised about it.
Months ago, during yet another hike in petrol and diesel prices, I saw someone representing the petrol companies being interviewed on television. He was asked: “Why is it that prices at the pump always go up immediately after a rise in the price of a barrel?” He defended the principle saying that profit margins were small and even the slightest rise in the price of crude oil just had to be reflected on the forecourt as soon as it happened. However when he was asked why the same thing didn’t happen when the price dropped he responded; “It isn’t a linear connection between the two you know. Just because the price drops at source we are still selling the fuel we bought at the higher price. This, by necessity, means the prices stay higher until we start to sell the cheaper stock.” Sadly the interviewer failed to pick him up on his blatant contradictory answers.
The other overwhelming factor in the whole sad affair, assuming it’s true, is that this isn’t the first time that ‘Joe Public’ has been had over financially by large organisations. In the recent past our hard earned cash has had its buying power curtailed by a least two other big industries – namely the banks and the energy companies.
So what have petrol, banking and energy all got in common? That’s simple – we need all three of them to live. Even if you don’t have a car, your life is dependent on deliveries of goods to your local shops, buses and coaches. In the 21st century you cannot really survive without a bank account as so many financial transactions and transfers are done electronically. Every home, whether owned or rented, needs a method of cooking, heating and light.
There can hardly be a more powerful position to be in therefore than to be the CEO of a company who sells something or provides a service that everybody has to have. You can raise your prices knowing that some of your customers might defect to a rival but generally there will be just as many of your rival’s disgruntled customers preparing to come to you. All you have to worry about is increasing company profits so that shareholders get a big enough dividend for them to ignore your and your fellow directors Brobdingnagian pay rises and bonuses.
Given the above, why would anyone on the board of a petrol company, bank or energy supplier worry about ‘Joe Public’ and metaphorically how much they have left in their pockets at the end of the week? They are all, in my opinion, the modern equivalent of Marie Antionette when she said: “Let them eat cake”. They have no idea what their customers think of them and their company and just don’t care!