Sales of petrol in March plummeted to their lowest on record
Sales of petrol in March plummeted to their lowest on record despite an average price below 130p a litre. A year ago, petrol sales hit the previous lowest point following the second coldest March on record and pump prices reaching 140p a litre, AA research reveals.
Latest petrol sales figures from HM Revenue and Customs show that UK drivers this March bought 1.367 billion litres compared to 1.375 billion last March. Diesel consumption (including commercial use) in March rose to 2.230 billion litres compared to 2.109 in the same month last year.
Collapsing petrol demand has led to a 24.7% reduction in sales during the first quarter of this year compared to the same period in 2008, just before the credit crunch. Between 2008 and 2013, the number of registered petrol cars fell 9.7% - a reduction of 2.029 million cars.
Despite a 40% increase in registered diesel cars boosting numbers by 2.901 million cars between 2008 and 2013, HMRC figures show that diesel fuel sales (including commercial use) between January and March this year were only 5% higher than in the same period of 2008.
The AA believes the new record low in UK petrol sales may in part be explained by the reaction by households to the budgetary squeeze from domestic energy price hikes. Petrol price surges of up to 10p a litre, triggered by commodity market speculation from 2011 to late 2013, have shown that families and businesses reduce car fuel consumption when they need to stabilise their spending.
In December, a survey of 17,629 AA members found that 35% of them said they would cut back on car use (10% very likely, 25% quite likely) if domestic energy bills rose 10%. Among semi and unskilled worker and pensioner groups, 48% said they would balance their books by driving less.
If domestic energy bill increases have helped to put the brakes on road fuel consumption, that should be starting to ease off now. An AA-Populus Home Panel survey of 1700 members in late March found that April heading into May is the point when households turn off the winter heating.
Although 52% of the panel makes a decision to switch off depending on the weather, 10% usually turn off by the end of March, a further 21% in April and 11% in May. Unsurprisingly, that varies significantly by area of the country, particularly in Wales.
This week, the average price of petrol rose above 130p a litre for the first time since mid January. Yesterday, it averaged 130.21p across the UK, while diesel averaged 136.41p.
This was not the freezing, miserable, 140p-a-litre March of the year before
Edmund King, AA president
“Petrol sales have hit their lowest on record when pump prices were at a three-year low, the weather was relatively warm and dry, and the economy was showing signs of recovery. This was not the freezing, miserable, 140p-a-litre March of the year before,” says Edmund King, the AA’s president.
“Either the fear or reality of gas and electricity price surges has triggered an avoid-the-petrol-pump backlash to balance family spending or the trauma of speculator-driven road fuel price spikes over more than three years has seared into the psyche of the UK driving consumer. We may find out in the next couple of months as the boilers and heaters are turned off – and drivers look forward to summer motoring and trips out.”
(6 May 2014)