July petrol price update

Tourism to bear the brunt of inflated southern pump prices

Tourism to bear the brunt of inflated southern pump prices

Tourism to bear the brunt of inflated southern pump prices

Tourism across the UK is set to suffer from mid-July petrol prices that are nearly 14.5p a litre higher than at the start of last year's holiday season, according to the latest AA Fuel Price Report. This is being aggravated by the continuing £1-a-tank extra cost of buying petrol in the South compared to the North.

Petrol prices in southern areas without Asda fuel stations remain bloated despite the average UK price falling nearly two-thirds of a penny, from 118.08 pence per litre in mid-June to 117.46 now. The average cost of diesel has fallen more than three-quarters of a penny, from 120.52p a litre to 119.73.

With 85% of tourism trips to the West Country by car or campervan and 69% of holiday trips to Scotland by car, holiday business will potentially lose £7.25 each time one of those vehicles fills its tank on vacation this summer compared to the year before. In mid July 2009, a litre of petrol cost 103.09p a litre and diesel 104.22p.

The AA Fuel Price Report shows that the North/South price gap remains almost 2p a litre Drivers from the North heading to southern destinations will suffer an additional 1p-a-litre penalty. This month's AA Fuel Price Report shows that the North/South price gap remains almost 2p a litre, compared to just over 1p a litre at the same time last year.

A drop in the commodity price of unleaded petrol to below $680 a tonne and a stronger pound has taken the wholesale cost of petrol back below 34p a litre. In mid-February, when the wholesale cost of petrol was last below 34p a litre, the average pump price was around 112.5p a litre. With a 2p increase due to higher fuel duty and loss of the biofuel subsidy on 1 April, the AA argues that current petrol prices stand 2-3p adrift of where they should be.

Part of the blame sits with some of the major supermarkets continuing to charge 4-7p more a litre in southern towns lacking local fuel price competition. This means the cheapest petrol available to more than a million residents in towns and cities around the South, South East (not including London, where petrol is the UK's most expensive), Home Counties and rural West Midlands still costs more than the UK average.

The average price of petrol and diesel may have fallen 3-4p from the highs of mid May but fuel is still 14% more expensive than this time last year and that will hurt holidaymakers and their hosts alike

Edmund King, AA President

Comment

Fuel is still 14% more expensive than this time last year "Summer is the time when lack of fuel-price competition in the most populous part of the UK and sustained increases in fuel duty bear down hardest on businesses that rely on customers to drive to them, such as in the tourism industry. Petrol retailers and the Treasury need to remember that," says Edmund King, the AA's president.

"The average price of petrol and diesel may have fallen 3-4p from the highs of mid May but fuel is still 14% more expensive than this time last year and that will hurt holidaymakers and their hosts alike. We would urge drivers to use the tools available to them, such as fuel price comparison sites, mobile phone apps such as the AA fuel price app* for Iphone, and talking to the locals, to find the cheaper fuel along their holiday routes – without going too far off track or running their tanks empty. That way they should have more to spend and enjoy at the resorts."


(16 July 2010)

* With Gold or Silver Membership, fuel prices are available in the AA Breakdown and Traffic app.  The standalone fuel prices app is no longer available.