September Fuel Price Update

Pump prices down, but for how long?

Pump prices down, but for how long?

20 September 2010

UK average pump prices have fallen for the fourth month in a row but drivers are still paying £4.36-a-tank more for petrol than a year ago, according to the latest AA Fuel Price Report.

the duty hike could be shelved to help economic recovery A $6 dollar leap in the cost of oil and a weaker pound during the past month have cast a shadow over the cost of filling up in the coming weeks. On October 1, the Government adds a further 1p in fuel duty to petrol and diesel prices.

The average UK price of petrol fell 1.27p, from 116.52 p a litre to 115.25, between mid August and mid September. This time last year, it cost 106.54p a litre. Diesel now costs 118.02p a litre, compared to 119.15 a month ago, and is now nearly 11p a litre more expensive than a year ago.

The wholesale cost of petrol has risen around 2p a litre since mid August and, with market speculators looking forward to oil prices at the level that raised UK petrol prices to May's record high of 121.61p a litre, drivers may have to brace themselves for another rise. However, US oil and fuel stocks in August reached their highest for 20 years and were pulling back oil prices on Tuesday and Wednesday morning.

Comment

"Pump prices remain precarious with the possibility of a new upswing, and it will be bad timing if the 1p-a-litre fuel duty increase in October coincides with another £1 on the cost of a tank of petrol," says Edmund King, the AA's president.

"However, the bottom line is that petrol and diesel prices are around 9p to 10p more expensive than this time last year, providing the Government with a VAT windfall of at least 1p a litre. For that reason, the duty hike could be shelved to help economic recovery, ahead of the 2.5% VAT increase next year."

Across the UK, London remains the most expensive area for petrol at 116.2p a litre with Northern Ireland and Wales dearest for diesel at 118.7p. Yorkshire and Humberside is cheapest for both, respectively 114.2p and 117.2p a litre.

View the full AA Fuel Price Report »

UK pump price data provided by Experian Catalist

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20 September 2010