November Fuel Price Update

Diesel price returns to 2010 high

Diesel price returns to 2010 high

17 November 2010

Average UK diesel pump prices have returned to this year's high, but would have been far worse had sterling not strengthened against the dollar. The latest AA Fuel Price Report shows that diesel now costs 123.07p a litre, compared to the year high of 123.08 in May.

The stronger pound has also prevented the cost of petrol setting a new all-time high. Now at 119.08p a litre, the price would have been 3p higher had the $/£ exchange rate remained at the May level, when UK average petrol prices set the current record of 121.61p.

Knife-edge, dread and uncertainty are the words describing the state of UK fuel prices at present Ironically, on Tuesday, the inflationary impact of October's 1p fuel duty increase helped to weaken the pound. Increased pump prices were largely blamed for inflation of 3.2% last month – news that pushed the value of the pound back below $1.6.

Over the past month, the UK's average price of petrol has risen 1.33p a litre, from 117.75p a litre to 119.08. This is 10.44p a litre more expensive than a year ago (108.64), adding £5.22 to the cost of filling a tank. Diesel is up 1.77p, from 121.30p in mid October to 123.07 now. This time last year, the pump price was 109.79p a litre, having reached an all-time record of 133.25p in July 2008.

Comment

"Knife-edge, dread and uncertainty are the words describing the state of UK fuel prices at present," says Edmund King, the AA's president.

"The oil price hit a two-year high last week, spurred on by market speculators, before falling back into the $75-$85 range that has set the tone for most of this year. The wholesale petrol price touched $800 a tonne again last week before dipping down once more.

"The stronger pound has shielded drivers and consumers from the worst of these market changes. However, the fallout from next January's increase in fuel duty and higher VAT doesn't bode well for inflation figures and sterling, if this week's market reaction is anything to go by.

King adds: "At street level, a steady increase in pump prices, impending higher domestic energy bills, and even reduced reward points for supermarket fuel purchases, add to the sense of dread for the coming months."

Shopping around for fuel can pay off for cash-strapped drivers, both locally and between towns. As well as a 2p-3p difference for cheapest petrol between neighbouring towns, mainly in the South, supermarket prices can vary 1p a litre depending on which part of town a driver lives. In built-up areas without an Asda fuel station, Jet's average UK petrol price points to a good alternative to supermarkets. Supermarket diesel prices on average tend to be well below the UK average.

Regionally, petrol prices in Wales (119.4) and East Anglia (119.1) showed the smallest increase, but still lagged well behind Yorkshire and Humberside, the cheapest region at 118.2p a litre. Northern Ireland and London remain the most expensive areas for petrol at 119.7p a litre.

Wales and Northern Ireland shared the spot for most expensive diesel in the UK at 123.6p a litre, while Yorkshire and Humberside enjoyed the cheapest average of 122.3.

View the full AA Fuel Price Report »

UK pump price data provided by Experian Catalist

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22 November 2010