October fuel prices

Autumn chill hits UK pump prices

21 October 2011

petrol and diesel prices are at levels never before endured at this time of year

petrol and diesel prices are at levels never before endured at this time of year

Heading into autumn and winter, petrol and diesel prices are at levels never before endured at this time of year. This follows summer prices that, compared to those in 2010, averaged 17.5p a litre higher for petrol and 19.7p more expensive for diesel, according to the latest AA Fuel Price Report.

In mid October, UK petrol pump prices are averaging 134.51p a litre, compared to 135.61p in mid September. They fell as low as 134.37 last week before rising again. Diesel, now averaging 139.65p a litre compared to 139.62p a month ago, has sat within a 139.5p -140p range since the first week of September.

Summer averages

Throughout the summer ‘motoring season’, from April to mid October, the cost of petrol has averaged 135.50p a litre and diesel 139.98. Prices peaked at May’s record average prices of 137.43p for petrol and 143.04 for diesel and fell as low as 133.68 for petrol and 137.69 during the first weekend of July. These summer averages compare with last year’s 118.00p for petrol and 120.25p for diesel.

A family with two cars has typically spent £241.54 more on petrol over this summer compared to a year ago, while filling up an 80-litre commercial van tank has cost on average £15.76 more each time than last summer.

International factors

The UK’s stubbornly high fuel prices come despite Libyan oil production starting up again and the International Energy Agency forecasting lower global oil demand. However, instead of following the fundamentals of supply and demand, the agency reports that current oil prices reflect more the market’s reaction to the eurozone crisis. Unfortunately, for UK drivers, the pound also lost value against the dollar when wholesale petrol fell below the $1000-a-tonne mark in late September.

Inflation

September’s RPI inflation of 5.6% casts an even darker shadow over fuel prices next year, threatening to add another 7p – 8p to the price of petrol and diesel within the next 12 months. With 3.02p-a-litre increase in fuel duty scheduled for 1 January 2012, pushing it up to 60.97p a litre, an inflationary increase reflecting 5.6% would add a further 3.4p. And that’s before VAT totals the increase over the next 12 months to around 7.7p a litre.

Comment

The squeeze from relentlessly high pump prices is due to get worse as driving in the dark and winter weather adds greater fuel consumption to motorists’ misery

Edmund King, AA president

“The squeeze from relentlessly high pump prices is due to get worse as driving in the dark and winter weather adds greater fuel consumption to motorists’ misery. A £241 drain on family budgets this summer from higher petrol prices has been damaging enough and will have taken a huge chunk out of potential consumer spending,” says Edmund King, the AA’s president.

“Over-priced Brent crude, still $22.5 a barrel more expensive than benchmark WTI in the US, will be generating extra tax for the Government. However, if the Government isn’t prepared to tackle high oil and fuel prices and their drain on the nation’s wellbeing, it should at least commit to freezing fuel duty until petrol falls at least below 125p a litre and diesel below 130p. If not, even more lower-income and rural motorists will be driven off the road.”

Supermarkets

Across supermarket brands, the average price of petrol ranges from 130.39p a litre to 133.32, with Asda the cheapest, and Jet the closest non-supermarket brand with an average of 133.92. Average diesel prices between the supermarkets show a tighter range of 135.91 to 138.13p a litre, with Jet once again close averaging 138.75.

Regional

Regional average pump costs reflect flux in the market as prices set off on what is likely to be yet another temporary rise, reflecting eurozone-inspired oil price swings. Consequently, London (petrol 135.6p) and the South East (135.3p) have overtaken Northern Ireland (135.2p) as the most expensive regions for petrol, while Northern Ireland and London share the position for most expensive diesel in the UK (140.2p). Yorkshire and Humberside remains the cheapest region for both petrol (133.7p) and diesel (138.9p).

(21 October 2011)