April Fuel Price Update

Rural areas suffer worst with record petrol prices

16 April 2010

UK petrol prices soar 4p a litre closer to a new record

Petrol prices in the UK continue to rise to new record highs hitting rural drivers hardest, the AA Fuel Price Report for April has found. Almost three out of every four drivers in the South West, Wales and Northern Ireland are cutting back on car use, on non-fuel expenditure or both.

Average UK petrol prices have now reached 120.53p a litre, up 4.44p on mid-March's average of 116.09p. This has added £2.22 to the cost of filling a typical 50-litre fuel tank and raised the monthly petrol cost for a family with two cars by £9.43. The same family, who at the beginning of the year was spending £233.32 a month on fuel (109.88p), now has to find £255.93.

Since mid-March, the average price of diesel has risen from 116.87p a litre to 121.56, adding £2.35 to the cost filling a tank.

Research from the AA/Populus panel of 17,480 AA members has found that tolerance of rising fuel prices has finally snapped in parts of the country that have enjoyed the lowest average petrol prices in recent months. In Yorkshire and Humberside, the cheapest area in the UK for petrol and diesel (119.6p and 120.6p) respectively, the percentage of drivers cutting back on car use, other family expenditure or both has shot up by 10% to 69%.

However, it is in rural areas that drivers are most struggling to cope with the higher pump prices, with 72% of the sample in Wales cutting back and 70% in the South West. Northern Ireland, with the highest regional prices at 121.2p for petrol and 122.4 for diesel, has the biggest proportion cutting back at 73%.

The wholesale price of petrol continues to hover around $800 a tonne and the pound has strengthened slightly, offering the hope of at least a levelling off of the price of unleaded petrol.

Supermarkets continue to hold back on prices rises with Asda 2.5p below the UK average and, for the first time in months, all four majors have average petrol and diesel prices that undercut non-supermarket retailers. Jet is still managing to keep its average price below 120p a litre.

Comment

"The debilitating impact of higher fuel prices, hitting 18-24 year olds hardest (74% cutting back), has been picked up in some election manifestos with the announcement of consultation on a 'fuel stabiliser'. Although this is welcome, main parties have yet to come forward with clear and resolute proposals to tackle or mitigate higher fuel prices more immediately, particularly for those affected disproportionately. A commitment to help rural communities in one manifesto looks to support post offices and pubs, but no mention of petrol stations that are essential in the absence of public transport," says Edmund King, the AA’s president.

"The sort of action needed includes: a commitment to freezing fuel duty until the pound strengthens and prices return to more normal levels, a raising of the non-taxable mileage allowance for volunteer drivers whose falling numbers are placing a strain on community services, and business rates that allow the surviving independent petrol stations to keep forecourt prices competitive. Retailers in some areas are reporting fuel sales down 20% – that means less tax for Treasury, less vibrant business and more discontent among motor voters."

King adds: "We believe that the 43 million drivers out there could be very influential in the outcome of the general election as most are voters. Amongst these motor voters the floating 'Focus Females' seem to be more undecided and hence more prone to be swung. Political parties should consider what they can offer on fuel prices to get these influential voters on board.

"Political candidates who bury their heads in the sand and hope high prices will just blow away also need to look at the latest attempts by stock market speculators to talk the price of oil up to $100 a barrel. This week the International Energy Agency warned that oil prices are 'overheated' and endanger economic recovery. There are big challenges related to fuel and oil prices and, so far, little political steer in this election campaign."

Factfile

View the full AA Fuel Price Report »

UK pump price data provided by Experian Catalist

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23 April 2010