Oil is sold by the barrel in us dollars at the international stock market.
For the last however many months the dollar has depreciated compared to the pound to a point that the dollar had moved from 1.6 to even over 2 to the pound at times. At the stock market, the price of fuel appears to have gone to around 100 dollars to a barrel. But why is that affecting the price here at the pump? What about the difference in the exchange rate? When it got to around 100 dollars to the barrel they put prices up at the pump here, claiming oil cost more - but at the same time the dollar was losing value so although it cost more dollars it actually cost the same or maybe less pounds. So the price of fuel has not gone up, all they have done is to adjust the price of oil to reflect its true value due to the lower value of the dollar but the oil companies have taken advantage of this to yell that it costs more and rip us off.
When it was less than $90 a barrel we were paying about 80p a litre at the pumps here. The dollar has depreciated since and yet we are paying more because we are told oil costs up to 100 dollars a barrel, but why does that matter because the dollar's lost value against the pound. So why are petrol stations increasing charges here when the pound is stronger so that $100 is actually less in pounds than the $90 was?
So if the price of oil goes up from $90 to $100 but the value of the dollar has fallen against the pound, then oil should be the same or cheaper here at the pump, NOT more expensive because of the fact that it costs more DOLLARS to buy when the dollar has deprecated against the pound.
Does anyone see what I'm trying to ask?