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15 September 2011
End-of-summer respite eludes struggling UK drivers
High petrol prices persist as drivers head back to work after the summer break, still within 2p of the record set at the start of the summer. Oil price volatility and a weaker pound have prevented pump prices from following the traditional downward trend that usually marks the end of summer motoring, the latest AA Fuel Price Report notes.
On average, the UK petrol and diesel prices are almost back to where they were a month ago, having dipped 1.5p by the end of August before climbing again. A litre of petrol now costs 135.61p and diesel 139.62, compared to mid-August’s 135.71 and 139.89 respectively. In early May, petrol hit the all-time high of 137.43p and diesel 143.04.
A year ago, petrol averaged 115.07p a litre and diesel 117.54. Petrol’s 20.54p and diesel’s 22.08p higher prices mean that:
UK families remain hostage to fuel price movements that buck traditional trends, and oil prices that don’t even make sense to experts in the market
Edmund King, AA president
Fluctuating oil prices, that have swung from $107 a barrel to $115 and back down to $112 in the past month, have continued this year’s trend of fuel price turbulence that raises drivers’ hopes of relief one fortnight before dashing it the next. A seven cent drop in the value of the pound against the dollar since late August has denied drivers a 2p saving on a litre of petrol.
Even more disturbing is expert oil market analysis that concludes that Brent crude oil is overvalued by $10 a barrel against the WTI benchmark - potentially worth 5p a litre at the petrol pump. This comes despite growing global economic gloom and predicted lower demand for oil.
“UK families remain hostage to fuel price movements that buck traditional trends, and oil prices that don’t even make sense to experts in the market. It’s time the Government asked questions and, at the very least, introduced transparency into the oil, wholesale and retail markets. Why? Because the consumer is clearly being put through the wringer to line someone else’s pocket,” says Edmund King, the AA’s president.
“Earlier this week the Transport Secretary suggested that railways have become a ‘rich man’s toy’. At the rate we are going with fuel prices, the car will not be an option for the ‘poor man’ either.”
King adds: “Current fuel prices would be worse were it not for UK supermarkets’ traditional lag in passing on higher wholesale costs. A more sensible approach to money-off-fuel vouchers, with £30 in-store qualifying spends giving consumers with smaller budgets access to fuel discounts, was also very welcome.”
Regionally, petrol and diesel prices are in a state of flux, with some areas enjoying slightly lower petrol prices and others slightly higher. London takes over Northern Ireland’s position as the most expensive area for petrol at 136.2p a litre, while Northern Ireland and Scotland are jointly dearest for diesel in the UK at 140.1p. Humberside and Yorkshire remains cheapest for petrol at 134.9 for petrol and 138.9 for diesel.
(30 September 2011)