Are oil companies reducing prices quick enough?

Posted by admin on 15 October, 2008 under Business news | Be the First to Comment

We have seen a dramatic fall in oil prices since July 2008 where the Dollar price per barrel was $147 and today the figure is just under $78!

However, as Virgin Atlantic announces that it is to reduce its fuel surcharges on flights for most passengers in response to a fall in the price of oil, we can see that these reductions are in no way as bigger a percentage as the fall in the price per barrel.

Virgin’s surcharges for its economy passengers shorter-hall routes will be cut by £10 to £68 from £78 (12.8% cut) and on their long-haul routes economy charges will drop from £109 to £96, which represents a fall of 11.9%.

This is by no means the fault of Virgin, as they are more than likely being charged by the oil companies for their fuel at a still comparatively high rate, despite the fall of nearly 47% on the price of crude. This is also the case at the pumps across the UK, which have seen a fall in recent weeks, but not to the same extent as crude oil prices – even Gordon Brown has called for a cut in petol prices.