£1-a-litre litre petrol AND diesel, but only if you drive abroad
UK drivers will discover the holy grail of pump prices – £1 a litre or less for petrol AND diesel – when they drive on to the Continent this summer, this month’s AA Fuel Price Report highlights.
A survey of current average pump prices in European countries reveals that British holidaymakers are likely to find petrol at the equivalent of a £1 a litre or less in Austria, the Czech Republic, Luxembourg, Slovakia and Spain.
For diesel drivers, looking for relief from the 2015 Great British Diesel Rip-Off, the only countries where they won’t find diesel at less than the equivalent of £1 a litre are Italy, Norway and Switzerland.
The supermarkets’ decision to lower the price of diesel below petrol’s is very welcome, particularly for tradespeople who haven’t been able to get fuel card discounts, but this more realistic pricing has been too long in coming.
The AA highlighted the 4p to 6p over-charging for diesel, compared to petrol, in April and it has been three and a half months of the 2015 Great British Diesel Rip-Off.
Even over the weekend, petrol averaged 117.10p a litre while diesel was 118.33p. This contrasts with diesel averaging 5p a litre cheaper than petrol at wholesale level in the week before last.
The ordinary diesel driver has been blind to this over-charging simply because there isn’t the fuel price transparency that is normal in Australia, South East Asia and across the USA. It is time the government resurrected the 2012 attempt to get the fuel industry to show the track of oil price compared to wholesale cost versus pump price, taking into account the exchange rate. In short, a fair price.
20 July 2015
Back in the UK, the average price of petrol is 117.24p a litre, slightly higher than the 117.19p a month ago. The average diesel price has dropped from 121.00p in mid June to 119.33p in mid July.
Far from it being a moment of joy for diesel drivers, the amount they are being over-charged at the pump for their fuel has grown from around 3.5p a litre to around 4.5p a litre. Midway through June, the wholesale prices of petrol and diesel feeding into the pump were almost the same – but diesel cost on average 3.8p more at the pump. This month, although diesel is currently averaging 2p a litre more at the pump, wholesale prices in the week before last saw diesel averaging 2.5p a litre cheaper than petrol.
It would have been worse had supermarkets not offered some respite for diesel drivers with a 2p drop in diesel prices last week.
To add to the sense of UK drivers being exploited by fuel business interests, the Iran nuclear deal had little impact on the price of oil despite the prospect of more crude being released on to an already over-supplied global market. Over the past month, even with Brent crude falling 9.5%, from $63 to $57 a barrel, the wholesale price of petrol has fallen just 2%, from around $737 a tonne to $725.
And that is why driving on to the Continent will be a breath of fresh air for UK drivers, and a huge eye-opener for those with diesel cars.
A main reason for 12 of 17 European countries charging less for petrol than in the UK is the high level of tax (VAT and duty = 66% of the pump price) levied here. That 12 would be much closer to 17 were it not for the euro being more than 11% weaker against the pound, compared to last year.
As for the overwhelmingly lower price of diesel on the Continent compared to the UK, the high rate of British fuel tax and preferential rates of tax on diesel in many European countries do not altogether explain the huge price difference.
It is the fact that, in the UK, pre-tax diesel at the pump is 4.3% more expensive than petrol (diesel 41.49 p/ltr v 39.75 p/ltr) but 9.2% lower in Belgium, 7.3% lower in France and 6.6% lower in Germany. In Europe, the lower wholesale price of diesel compared to petrol is reflected at the pump.
Unlike the UK, where the lack of fuel price transparency means that drivers on major routes have little or no idea of often inflated pump prices - until they have to pull on to a forecourt, British motorists in Europe are able to scan ahead for prices at possible fuelling stops along their routes.
Official websites in countries, such as France, Austria and Denmark, provide almost real-time price information which allows drivers to find the competitive retailers. Last July, the European Commission highlighted that Austrian pricing regulation, introduced in 2011, had brought about a pump price reduction of 1.5% to 2.5% for diesel and of 3% to 3.6% for petrol.
ordinary diesel car owners will see just how much they are being exploited and ripped off by a UK fuel industry that thinks it is acceptable to manipulate the prices these drivers pay
Edmund King, AA president
“UK drivers on European roads this summer will discover a whole new world of transparent pricing at the pump. Many will find the £1 a litre that was so elusive when oil prices crashed at the start of this year. Most importantly, ordinary diesel car owners will see just how much they are being exploited and ripped off by a UK fuel industry that thinks it is acceptable to manipulate the prices these drivers pay,” says Edmund King, the AA’s president.
“The same drivers will conclude that the UK government wants their tax and their votes but does little to offset the disadvantages the British driving consumer faces – apart from a duty rebate for a couple of dozen of remote rural communities and a very modest fuel price transparency trial along the southern end of the M5, involving just five petrol stations.
“The artificially high cost of diesel is also being reflected in diesel surcharges levied on customers by delivery firms - adding an extra 0.5% or more to invoices paid by companies and individuals receiving the goods, AA analysis has found. Inevitably, much of that higher transport cost will be passed on to consumers. It’s not just drivers being affected by the 2015 Great British Diesel Rip-Off.”
Across the UK, Wales sells the cheapest petrol, averaging 116.9p a litre, while Scotland’s is dearest, at 117.7p. Northern Ireland averages the cheapest for diesel at 117.9p a litre, while Scotland is unusually joined by Yorkshire and Humberside, West Midlands and East Anglia selling the most expensive, at an average of 119.6p a litre.