November Fuel Price Report

A new era for for car fuel prices

16 November 2007

Global prices and local supply problems usher in a new era for car fuel prices

Runaway oil prices, coinciding with a fire at the Coryton refinery, have seen average UK petrol and diesel prices break through the £1-a-litre barrier for the first time in the nation's history, according to the AA's latest mid-monthly Fuel Price Report.

Change in average fuel prices

Mid-monthly prices show that the average cost of petrol has risen from 97.7 pence per litre in October to 101.51 now. The 3.81 pence-per-litre increase adds a further £8.36 to the monthly petrol cost of a family with two cars. The pace of increase with diesel has been even more dramatic, rising 5.64 pence to 105.44 pence per litre.

Rising trend

A track of price rises show that the price of petrol had been rising by around a tenth of a penny per day in the lead-up to the Coryton fire (31 October) and then took off, with a 0.5 pence-per-litre rise during the following weekend and a further 0.42 during the next. From the start of November to now, diesel has shot up 3.57 pence per litre, compared to 2.53 for petrol.

Regional variation

However, regional figures show that the difference in the price of petrol in Scotland, one of the cheapest regions for petrol, and London, one of the most expensive, has fallen from two pence last month to half that this month. This is despite some petrol stations occasionally running dry in East and South East England as suppliers struggled to fill the gap left by the temporary halving of output from Coryton.

Across the UK, Northern Ireland has become the most expensive region to buy petrol and Wales the most expensive for diesel.

Brands

Analysis of prices by brand shows that three of the four main supermarkets have managed to maintain average petrol prices below the £1-a-litre mark, with Asda still a penny cheaper than even its closest rivals. Shell and Jet are matching Tesco on both petrol and diesel prices.

AA comment

"Even with the price of oil soaring above $90 a barrel since late October, there have been more immediate and localised pressures on the price of UK fuel, such as refinery maintenance problems on mainland Europe, the Coryton fire and the ongoing switch to diesel with 10 parts-per-million sulphur content. Despite the enormous logistical task of sourcing fuel to fill the gap left by reduced production at Coryton, the suppliers have managed to keep petrol stations stocked, albeit with occasional delays, and avoided any panic-buying by drivers," says Paul Watters, head of AA Public Affairs.

"The breaching of the £1-a-litre price threshold has had, perhaps, as significant an impact on fuel prices as other pressures. Retailers, who may have previously shied away from charging above the psychological £1 barrier, have seen neighbouring competitors do so, followed suit, and the genie is now out of the bottle for good.

"Sadly, had the Government listened to pleas not to impose the 2p duty rise in October, the UK would on average still be a penny away from the brink. In the light of current rising prices, the proposed further 2p increase in April must be regarded as unthinkable."

Get the latest AA fuel price report

 

16 November 2007