July Fuel Price Report

Fuel price rises level off at last as Chancellor drops 2p duty rise

16 July 2008

Petrol and diesel prices hit a plateau this week following a dramatic slowing in the pace of increase over the past month, according to the latest AA Fuel Price Report.

Unlike the 5-7 pence-per-litre increase for petrol and diesel last month, average prices mid-June to mid-July rose by a more modest 1.5 pence. Diesel price rises now largely mirror those of petrol - although diesel being 11.3% more expensive severely undermines its 15-20 per cent fuel efficiency advantage.

Between mid-June and mid-July, average UK petrol prices rose 1.35 pence, from 118.16 to 119.51 pence per litre. Diesel costs went up 1.52 pence per litre, from 131.56 to 133.08.

On Tuesday, for the second time in a fortnight, petrol prices fell mid week, something not seen since the middle of February. Buying patterns over the last two weekends when supermarkets take a greater share of sales indicated slight price falls, suggesting a pivotal point for prices this year.

Wholesale prices for petrol on the Continent fell five per cent briefly last week and for one day UK average prices dipped three-hundredths of one per cent before resuming its upward path.

"It's difficult to be sure that petrol prices have reached their peak but, in the climate of high price volatility, the UK has come as close as it has in the past five months to a halt in soaring prices. It is ironic that this has happened on the day that the Chancellor announces a deferral of October's fuel duty increase, but the reality is that every little helps alleviate the pain of high fuel prices for the UK's beleaguered motorists," said AA President Edmund King.

"At least we saw the industry pass on some of last week's petrol price fall, however pitifully small. In early June, when the continental wholesale price of diesel fell 10 per cent over a two-week period, UK drivers saw nothing but a one-day stalling of prices. Consequently, when fuel prices eventually start falling we will be watching them like a hawk to spot any suppliers who drag their feet.

"For the moment, however, it's fingers crossed as strikes on Brazilian oil platforms, possible renewed unrest in Nigeria or a severe hurricane in the Gulf of Mexico have the potential to send oil prices up again."

Although Northern Ireland saw the biggest increase in the price of petrol over the past month, London remains the most expensive region to refill. Likewise, only Northern Ireland and Scotland beat it on price for diesel.

View the full AA Fuel Price Report.

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16 July 2008