Fuel Prices 2008

A year-long rollercoaster for petrol and diesel prices

2008 was a rollercoaster for motorists at the filling station – we saw petrol and diesel prices rise to record levels and increase at the fastest rate the AA had ever seen though the year ended with prices dropping back to a 21 month low.

Graph showing changes in UK average petrol and diesel prices and crude oil prices through 2008

January

1Petrol 104.3 p/litre
Diesel 109.2 p/litre (Difference 4.9 p/litre)
Oil $91.82 / barrel

Petrol and diesel prices continued to climb to record highs as the latter edged towards the £5 gallon for the first time ever.

Supermarkets eased off the festive brakes on fuel prices in the second week of January.

Oil prices rose to $98 before dropping back to $90.

February

Petrol 104.0 p/litre
Diesel 109.3 p/litre (Difference 5.3 p/litre)
Oil $99.78 / barrel

A $10 drop in the price of oil in January barely registered on UK pump prices, UK motorists at best enjoying a halt in rising costs.

A comparison of prices by brand showed supermarkets reducing prices while non-supermarkets held theirs.

Year on year, filling a 50-litre tank cost £8.62 more and a family with two petrol cars was spending £36.96 extra a month on fuel.

March

Petrol 106.8 p/litre
Diesel 114.3 p/litre (Difference 7.5 p/litre)
Oil $100.11 / barrel

The price of oil climbed above $100 a barrel, but diesel drivers suffered more than petrol owners from rising prices.

The AA urged drivers considering a switch to diesel to calculate the benefits carefully and build in leeway should the differential increase.

The Chancellor deferred an increase in fuel duty in the "2p or not 2p" Budget.

The £5 petrol gallon arrived at motorway service stations.

Hospital volunteer drivers threatened to quit.

April

Petrol 108.1 p/litre
Diesel 117.4 p/litre (Difference 9.3 p/litre)
Oil $111.36 / barrel

European refinery maintenance problems ratcheted up the pressure on fuel prices, particularly diesel which rose twice as fast as petrol.

The average price of petrol over 12 months had reached £1 a litre.

Year on year, UK motorists were spending £10.2 million a day extra on petrol and the AA warned that this loss to consumer spending would hit the high street and the economy.

May

Petrol 112.6 p/litre
Diesel 124.2 p/litre (Difference 11.6 p/litre)
Oil $127.78 / barrel

Diesel prices rose by their highest monthly margin since the turn of the century and the average UK petrol price was now above £5 a gallon.

Scotland endured an industrial dispute at Grangemouth and, after initial panic buying, settled down as retailers limited sales.

The role of market speculators in oil pricing began to be realised. A KPMG energy expert warned: "The combination of traders moving resources into commodities and the weak dollar has had a significant role in the surge in pricing in recent weeks."

June

Petrol 118.2 p/litre
Diesel 131.6 p/litre (Difference 13.4 p/litre)
Oil $139.83 / barrel

Diesel prices rose by yet another record amount with petrol also going up by its highest-ever margin. This was despite a temporary 10 per cent drop in diesel wholesale prices in late May.

Year on year, a 50-litre tank of petrol cost £10.13 more and a family with two petrol cars was spending £43.40 more a month on fuel.

Driver attention was diverted by a four-day tanker drivers' dispute and fears of fuel shortages.

Volunteer drivers petitioned Downing Street online over mileage allowances.

Two-thirds of AA members said they would vote the Government out if petrol prices rose above 125p a litre.

Production restarting at Grangemouth and a fire-damaged Finnish refinery offered some hope.

July

Petrol 119.5 p/litre
Diesel 133.1 p/litre (Difference 13.6 p/litre)
Oil $125.11 / barrel

Two days after our mid-month report (17 July) petrol and diesel prices peaked at 119.7 ppl and 133.25 ppl respectively. The pace of price rise had slowed from the beginning of July but the price of oil continued to rise, hitting an all-time high of $147 mid month.

The price of diesel had reached £6 a gallon and a 50-litre tank of petrol cost £11.46 more than a year before.

A family with two petrol cars was spending £49.11 extra a month on fuel compared to 12 months before.

In early July, the US Treasury raised the mileage allowance for workers using their cars on business but pleas from UK volunteer and working drivers fell on deaf ears in Government.

London and the South East were the most expensive areas for petrol, beating even traditionally expensive rural areas.

August

Petrol 113.2 p/litre
Diesel 125.6 p/litre (Difference 12.4 p/litre)
Oil $113.5 / barrel

Four days after the peak, and reflecting rapidly-falling wholesale prices, Asda fired the first shots in a five-month supermarket fuel price war. Their 3p price drop was mirrored by other supermarkets – but often only where they were in direct competition with Asda.

A Scots MP met Tesco's chief executive to get prices equalised between neighbouring towns Inverness and Elgin.

On average, fuel prices were not falling as fast or as far as reductions in the wholesale price and the AA, fearing a repetition of late summer 2005, accused most retailers of dragging their feet on prices.

Some motorway service stations were found to be charging holidaymakers 6p a litre above the UK average for petrol.

September

Petrol 112.9 p/litre
Diesel 124.3 p/litre (Difference 11.9 p/litre)
Oil $98.17 / barrel

The UK divided into two types of town: those with Asda petrol stations where competitors dropped their prices to match and those without where cheapest fuel prices were two to three pence higher.

The Belfast Telegraph, helped by the Consumer Council of Northern Ireland, the only consumer watchdog in the UK to speak out, exposed the pricing differences between towns and caught some supermarkets raising prices as oil prices fell.

Northern Ireland's finance minister criticised fuel retailers while motoring clubs across Europe banded together to approach the EU for an investigation into fuel price movements.

October

Petrol 106.4 p/litre
Diesel 117.7 p/litre (Difference 11.3 p/litre)
Oil $67.15 / barrel

Supermarkets finally passed on drops in wholesale prices – stung into action by Asda's national pricing and mounting government pressure following an AA meeting with Downing Street advisors.

Average UK petrol prices collapsed 6.5 pence in a month, helped by Tesco slashing 3p off a litre of petrol which dropped the average UK price by an unprecedented 2p in one weekend.

Compared to the record high in July, the cost of a tankful of petrol fell £6.65 and a family with two petrol cars were paying £28.51 less.

A 25% loss in the value of the pound against the dollar prevented prices falling further as both oil and wholesale fuel are traded in dollars.

November

Petrol 94.9 p/litre
Diesel 108.8 p/litre (Difference 13.9 p/litre)
Oil $49.94 / barrel

A huge 11.54 pence-per-litre fall in the price of petrol over the month started with supermarkets racing to be first to sell petrol below £1 a litre. However, two small independent retailers beat them to it.

A new trend had begun to emerge of independent petrol stations with shops and minimarts competing with and sometimes undercutting supermarket prices – profits being made on non-fuel sales.

A fully-fledged price war between supermarkets was in full flow as the price of oil headed towards $50 a barrel but the increasing price gap between petrol and diesel was a growing concern.

In his Pre-Budget Report, the Chancellor drops VAT 2.5% but raises fuel duty 2p to 52.35p per litre. With falling prices, the Government takes at least a third of a penny more from each litre sold.

December

Petrol89.48 p/litre
Diesel 101.93 p/litre (Difference 12.45 p/litre)
Oil $48.56 / barrel

Fear of Christmas customers spending less in stores as a result of the economic downturn spurred supermarkets to maintain high-profile reductions in fuel prices. Shell exemplified the move by some non-supermarket retailers to become almost as aggressive as supermarkets with petrol pricing.

As prices dropped, the petrol-diesel price differential widened to 15p a litre and the AA was bombarded with emails and telephone calls from exasperated diesel car owners.

A stunning 5p drop in the price of diesel, initiated by Morrisons and quickly followed by others, not only brought the cheapest UK diesel below £1 a litre but shrunk the price gap at competitive retailers to 10p.

Join the discussion in the AA zone

 

19 December 2008

1fuel prices are mid-month snapshots, oil is end-of-month closing price except for December