Fuel sales fall

First quarter petrol and diesel sales drop by one billion litres

8 July 2011

Filling stations sold one billion litres less petrol and diesel in the first three months of this year compared to the same period in pre-credit crunch 2008. Milder weather, including the ninth warmest February on record, means that snow disruption was barely a factor.

Retail sales of petrol from January to March were 835.654 million litres lower than during the same period in 2008. For diesel, retail sales dropped by 246.994 million litres over the same period.

This 15.2% collapse in petrol sales and 6.0% fall in diesel sales is largely explained by austerity and record fuel prices, which saw petrol rise 7.94p a litre and diesel 10.51p during the first three months.

Comparing this year to last, UK petrol retail sales from January to March this year were down 3.7% on the same period last year. Diesel sales on forecourts were up 0.5%.

According to the AA/Populus panel, the percentage of AA members cutting back on car use, other spending to compensate for higher fuel costs, or both has risen from 63% during the Christmas break to 76% in mid-May.

Tax loss

For the Government, the fall in fuel sales has deprived the Treasury of £637.8 million in tax.

The first three months of this year saw the equivalent of 13.5 days of UK petrol sales wiped out - good for the environment but appalling for families, businesses, rural communities and the Treasury.

Edmund King, AA President

Market comparisons

With a milder winter, supermarkets appear to have suffered less than non-supermarket rivals. Government figures show that, year on year, supermarket petrol sales fell by 1.2% from January to March this year while their competitors lost 5.3%.

A year earlier, in the first quarter of 2010, with prolonged bad winter weather, supermarket sales fell 8.9% compared to the same period in 2009 while rivals' fell 3.0%. It is thought that ease of access in snowbound conditions was a major factor.

Comment

Our study shows the real impact of record pump prices. Petrol and diesel prices continued to set new records up until the second week of May, adding a further 4.3p a litre of petrol and 3.3p to diesel.

However, supermarkets have launched a sustained campaign of fuel-related promotions and, combined with a loss of appetite among oil market speculators leading to falling oil prices, the next quarter's figures will be significant. So will drivers' finances show some resilience or have car-owning family budgets been so badly wounded that recovery needs a far greater stimulus?

According to Edmund King, the AA's president, "The full impact of higher VAT, unbridled stock market speculation and a weaker pound on fuel prices and drivers' ability to afford them have been laid bare.

"The first three months of this year saw the equivalent of 13.5 days of UK petrol sales wiped out – good for the environment but appalling for families, business, rural communities and the Treasury."