July petrol sales down

Pavlov effect sends July petrol sales crashing to winter levels

Pavlov effect sends July petrol sales crashing to winter levels

Pavlov effect sends July petrol sales crashing to winter levels

Petrol sales in the UK crashed to winter levels in July – a month when consumers were celebrating summer with a 1.1% surge in overall retail shopping sales, AA analysis of new HM Revenue and Customs figures reveals.

Down nearly 8% on June sales (1.603bn litres), drivers bought 1.476 billion litres of petrol last month. This is only 45 million litres more than the record low in February this year (1.431bn ltrs) and just 11 million more than January’s 1.465 billion litres.

July’s sales of diesel were down 5% on June’s, dropping from 2.331 billion litres to 2.213 billion litres. These include commercial usage.

Sudden 5p-a-litre rise

In June, when the average cost of petrol levelled at 134.6p a litre after surging to 140.0p in the spring, stable lower prices lifted petrol sales to a level last seen in November 2011. Last month, a sudden 5p-a-litre rise in wholesale costs raised the average pump price from a low of 133.7p on the last day of June to 135.8p by the middle of July and 137.2p by the end of the month. It finally started to level off at 137.6p in the first week of August.

Overall, UK petrol and diesel sales in July were down 6.2% (0.245bn ltrs) on the previous month’s and 1.6% (0.059bn ltrs) down on sales in July 2012, when the ‘summer of sport’ reduced consumption.  Tax income from duty on petrol and diesel sales fell £142 million in July compared to June and £35 million compared to July 2012.

It’s staggering that when brilliant weather sent consumers into the shops and gave the UK’s retail sector a strong boost, the complete opposite happened at the pumps

Edmund King, president of the AA

Staggering

“It’s staggering that when brilliant weather sent consumers into the shops and gave the UK’s retail sector a strong boost, the complete opposite happened at the pumps. Not only are petrol sales shadowing the record lows of this winter, but are lower than last July which included a week of Olympics football, opening ceremony and initial events,” says Edmund King, the AA’s president.

“You might have assumed that drivers cut back to splurge on the barbecue food, outdoor items, clothing and alcohol that lifted shop spending. However, all those items would normally go hand-in-hand with increased driving to go to friends, parties and days out.

“The fact is that, in June, when petrol prices stabilised at more than 5p a litre cheaper than in the spring, fuel sales soared to levels last seen in November 2011. A spike of up to 5p a litre in July, with many AA members asking us why pump prices went up 3p in a matter of days, triggered the opposite response.

“It seems that, as each penny increase registers on fuel forecourt price boards, drivers automatically cut back – even if they’re in the mood to spend elsewhere. Psychologists may have a field day with this – a Pavlovian reaction at the pump, perhaps?”


(23 August 2013)

Fuel price data supplied by Experian Catalist

Wholesale price data provided by fuelpricesonline.com

 

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