Posts

Fuel prices begin to rise again – and increases could get ‘nasty’

Fuel prices are heading back up

Fuel prices have started to increase again following a brief month of reductions in June. The price of petrol has risen 1.5p while diesel is up by a penny.

The average price for a litre of unleaded is now 129.21p, reports RAC Fuel Watch, and diesel is 131.95p.

An average 55-litre tank of petrol will now set drivers back £71.07, compared to £70.21 at the end of June. A tank of diesel increases by 51p to £72.57.

Surprisingly, supermarket fuel prices have suffered an above-average increase. On average, 1.88p was added to the price of a litre of petrol, up to 125.9p. Diesel went up 1.64p, for a per-litre cost of 128.6p.

Why are fuel prices rising?

Fuel prices are heading back up

The price of a barrel of oil is ultimately reflected in pump prices sooner or later. Wholesale prices for a barrel of oil rose mid-month to $67.41 on July 10th, but settled to $63.97 by the end of the month.

World events such as the tanker hijacking in the Strait of Hormuz can affect the cost of fuel because of supply. Oil traders alter their valuations accordingly.

The big worry at the moment is the fall in the value of the pound. Sterling fell around 3 percent at the time of the election of the new prime minister Borris Johnson. That’s a fall from $1.26, to $1.22.

If the pound stays in its weakened state, oil could rise to over $70 a barrel, with commensurate fuel costs rises to follow.

How to slice your monthly fuel cost

“Sadly, July saw a return to rising pump prices, making the respite of June all too brief,” said RAC fuel spokesman Simon Williams.

“While there were only relatively small rises in both petrol and diesel, the situation might have been far worse if the drop in the value of the pound had combined with the higher mid-month oil prices. And, of course this could still very easily prove to be the case if the pound doesn’t recover in the next few weeks.

“Drivers can only hope we don’t see the nasty combination of a rising oil price and a falling pound.

“This could easily lead to petrol going above the 2019 high of 130.67p seen at the start of June and diesel exceeding the year’s high point of 135.54p at the end of May.”

Fuel price war expected as Asda cuts petrol cost

fuel prices drops UK

Four months of record high prices could be coming to an end, if a predicted supermarket petrol price war comes to pass. Website PetrolPrices suggests Asda’s latest drop will send per-litre prices on the UK’s fuel forecourts tumbling.

Current petrol prices are circling the 130p per litre mark on average, but Asda is cutting 3p from a litre of diesel and 1p per litre of petrol from tomorrow.

In a move to mitigate near-unprecedented leaps in fuel costs – 11p for petrol and 7p for diesel between the beginning of February and end of May – Asda may start a chain reaction among other retailers.

fuel prices drops UK

Oil prices dropped by five percent over the course of last week, and Asda is being swift passing savings on to customers. Often, it can take up to a month before cost reductions per barrel are felt at the pumps.

“The news of supermarkets starting to drop prices is no doubt a good thing for motorists who have been suffering from price rises for four months now,” said Kitty Bates, consumer spokesperson at PetrolPrices.com

“We would expect to see other supermarkets follow suit over the next couple of days as they start to compete on price, with independent retailers following this once they have sold through their existing stock.”

Below 120p a litre coming soon?

The drop in oil prices, from $72 a barrel to $67 a barrel, has been the steepest fall in six months. If the fullest extent of the savings is to be felt, prices per litre of fuel should reduce to nearer 120p per litre and possibly further still.

fuel prices drops UK

“There’s considerable scope for prices to continue to drop, as oil prices have fallen drastically in the past few days and we would expect them to either level out or potentially fall even further.”

RAC fuel spokesman Simon Williams agreed. “The drop in wholesale costs has been dramatic, meriting far bigger price reductions for both petrol and diesel. For this reason, we view this round of cuts very much as a good start. We should really see more in the next week or so.

“We would very much like to see retailers reflect wholesale price reductions more closely. This is particularly the case with diesel, which has been a similar price to petrol on the wholesale market for some time, yet is still 5p a litre more expensive on average on the forecourt.”

fuel price drops UK

November sees 5p per litre drop in petrol prices. It should be cheaper still

November saw a petrol price drop of five pence per litre. That’s the biggest month-to-month drop since January of 2015.

Fuel prices

A fuel price war could be coming, as oil costs slump

Fuel prices

Fuel prices have hit highs not seen since 2014, but the AA says relief is on the way. Relief, it says, that could amount to 3p a litre – or £1.50 a tank.

Of course, there’s always a possibility that any savings consumers can look forward to may be dented by the rumoured un-freezing of fuel duty in the Autumn budget. It’s been held at 58p a litre since 2011.

Nevertheless, the AA predicts a forthcoming decrease in prices due to the strengthening of the pound, allied with a cut in the wholesale cost of oil. Such drops have triggered penny-by-penny falls in competing forecourts’ prices in the past, resulting in price wars at the pumps.

How to find the cheapest petrol and diesel near you

“In the past, such a significant drop in wholesale prices would have triggered a pump-price battle among the supermarkets” said the AA’s fuel price spokesman, Luke Bordet.

“For the moment, drivers should keep an eye out for competitive oil company sites, taking the opportunity to undercut expensive supermarket sites”.

A drop in fuel prices would follow a full 11 consecutive weeks of price rises to date. In that time, the national average for a litre of petrol has reached £1.31 a litre. Diesel is even more expensive, at £1.35 a litre on average. Contrast to July 2018, when the average cost for petrol and diesel was £1.28 and £1.31 respectively.

Read more:

Rising costs forcing young drivers off the road

Foxes

Rising insurance costs, mounting debts and the cost of lessons are to blame for young people being priced out of driving. That’s according to research commissioned by InsuretheGap, which found that 22% of under 25s cannot afford to learn to drive.

The Driving Standards Agency (DSA) says that the average cost of a driving lesson in the UK is £24, and you’ll need to factor in the cost of a provisional licence (£34 if you pay online), the theory test (£23), and a practical driving test (£62 weekdays or £75 evenings, weekends and bank holidays).

Assuming you have 10 lessons, that’s a total cost of £359, before you’ve considered the cost of insurance and the actual car. Passing first time could save you time and money.


More young driver news on Motoring Research:


Car insurance is a further barrier, with the average cost of a policy just under £3,900 for a 17- to 20-year-old driver. Little wonder, then, that an online petition called for car insurance for 18- to 25-year-olds to be capped at £1,200 a year.

InsuretheGap’s survey went on to say that without the support of parents or a bank loan, a quarter of young drivers would be unable to buy a car, and 24% said they would like to buy a car but would be unable to cover the running costs.

“When one in six jobs specifies that the applicant must have a driving licence, this generation are potentially being held back by their lack of wheels,” said Ben Wooltorton, director at InsuretheGap.com.

“The RAC Foundation analysed 847,000 job vacancies last year and found that jobs requiring a valid licence ranged from a zoo worker, a chef, sales consultant, security guard, hairdresser and even gymnastics coach, so we’re not just talking about driving jobs here”.

If you want to go out, don’t buy a car

Meanwhile, a similar study into the cost of motoring conducted by Admiral found that motorists under the age of 25 are having to fork out £3,435 a year to stay behind the wheel. This cost is broken as follows:

  • Fuel: £1,077
  • Insurance: £1,014
  • Maintenance: £558
  • Vehicle Excise Duty: £411
  • MOT costs: £375

The research claims that motoring is forcing young drivers to sacrifice social plans to stay on the road. Around two-thirds shelved plans to go shopping, while 60% decided against attending a music festival. Nearly half of under 25s were forced into abandoning holiday plans and smartphone upgrades, while 60% cancelled a romantic date.

Let’s just hope you love your car enough to forgo the opportunity for a candlelit meal with somebody you ‘met’ on Tinder.

RAC Fuel Watch

Fuel price rise a ‘perfect storm’ of Brexit and OPEC

RAC Fuel WatchA ‘perfect storm’ of a Brexit-induced plummet in the pound and a threat of oil production cuts by OPEC and Russia has led to the average price of fuel increasing 3p in just three weeks.

The average price of petrol now stands at 116p, says the RAC – a huge contrast to just eight months ago, where petrol was around 102p a litre.

The least economical cars on sale

Fuel prices falling after 4 months of hikes

Is this as good as it gets for cheap fuel prices?

The days of £1 a litre prices, last experienced around Christmas 2015, are now but a memory, says the firm’s fuel price consumer champion, RAC Fuel Watch.

Spokesman Simon Williams told Motoring Research there’s a threat of further fuel prices too, as the 14 oil-producing countries that make up OPEC are due to meet on November 30th, where they could possibly agree on a cut in oil production.

“Even the threat of a cut has been enough to push up prices,” said Williams. “We can expect further increases in the cost of a barrel of oil if OPEC actually does agree to cut oil production.

“It’s possible Russia will agree to a cut in production as well,” he added – Williams also revealed that the UK imports 40% of the diesel sold here, and it comes mainly from… Russia.

‘Flash crash’

The biggest factor in recent price rises has, however, been the ‘flash crash’ in the value of the pound on 7 October. As fuel is traded in US dollars, it’s this that has hiked up forecourt prices by so much recently.

The last time prices rose this quickly was at the start of 2011, revealed Williams. “Less than four months later, the then Chancellor George Osborne took the step of cutting fuel duty by 1p to 57.95p.”

These days, fuel is around 20p a litre cheaper than it was back then, but the outlook still looks rather ominous, said Williams.

“If the Chancellor has been tempted to raise duty in next month’s Autumn Statement as a result of recent lower fuel prices, the current uncertainty should make him think again.”

RAC Fuel Watch

Fuel price rise a 'perfect storm' of Brexit and OPEC

RAC Fuel WatchA ‘perfect storm’ of a Brexit-induced plummet in the pound and a threat of oil production cuts by OPEC and Russia has led to the average price of fuel increasing 3p in just three weeks.

The average price of petrol now stands at 116p, says the RAC – a huge contrast to just eight months ago, where petrol was around 102p a litre.

The least economical cars on sale

Fuel prices falling after 4 months of hikes

Is this as good as it gets for cheap fuel prices?

The days of £1 a litre prices, last experienced around Christmas 2015, are now but a memory, says the firm’s fuel price consumer champion, RAC Fuel Watch.

Spokesman Simon Williams told Motoring Research there’s a threat of further fuel prices too, as the 14 oil-producing countries that make up OPEC are due to meet on November 30th, where they could possibly agree on a cut in oil production.

“Even the threat of a cut has been enough to push up prices,” said Williams. “We can expect further increases in the cost of a barrel of oil if OPEC actually does agree to cut oil production.

“It’s possible Russia will agree to a cut in production as well,” he added – Williams also revealed that the UK imports 40% of the diesel sold here, and it comes mainly from… Russia.

‘Flash crash’

The biggest factor in recent price rises has, however, been the ‘flash crash’ in the value of the pound on 7 October. As fuel is traded in US dollars, it’s this that has hiked up forecourt prices by so much recently.

The last time prices rose this quickly was at the start of 2011, revealed Williams. “Less than four months later, the then Chancellor George Osborne took the step of cutting fuel duty by 1p to 57.95p.”

These days, fuel is around 20p a litre cheaper than it was back then, but the outlook still looks rather ominous, said Williams.

“If the Chancellor has been tempted to raise duty in next month’s Autumn Statement as a result of recent lower fuel prices, the current uncertainty should make him think again.”

Motorist filling up at fuel station

Fuel prices falling after 4 months of hikes

Motorist filling up at fuel stationUK fuel prices are belatedly beginning to fall after supermarkets led the way in early August 2016 with a 2p per litre price reduction on petrol and diesel.

Nationwide, RAC Fuel Watch petrol prices are now 0.41p lower than they were a month ago, meaning the average price of petrol is 111.8p per litre and diesel is 112.4p a litre.

From being slightly cheaper than petrol, diesel is regaining its price premium: the reduction in diesel prices during July was just 0.06p per litre.

RAC fuel spokesman Simon Williams said more price cuts should be in store. “We are hopeful that the early August supermarket cut will make a bigger difference to household budgets in the summer holiday period even though it came a more than a week later than it should have done.”

Falling fuel wholesale prices, he said, is being caused by an oversupply of oil and slowing global economic growth. This has made fuel significantly cheaper than a year ago.

“Motorists continue to benefit from the lower oil price which had led to petrol prices that are nearly 5p a litre cheaper than a year ago and diesel that’s more than 3p a litre less expensive.”

Prices in the East Midlands fell by the biggest margin, with petrol 1.53p per litre cheaper over the month, and diesel 0.95p per litre.

You’ll pay an average of 110.5p per litre for petrol in the East Midlands, compared to 111.7p per litre in the South East – worth bearing in mind if you’re travelling through the UK this summer.

Diesel prices only failed to fall in Scotland and Northern Ireland, but the latter is still the cheapest place in the UK to buy diesel; again, the South East is the most expensive, with diesel costing 112.5p per litre instead of Northern Ireland’s 110.9p.

That’s a hefty 1.6p per litre difference.

Unleaded and diesel pump nozzles

Be fair and cut prices NOW, RAC tells fuel retailers

Unleaded and diesel pump nozzlesUK fuel prices should immediately be cut by 3p per litre and if fuel retailers were playing fair they would have chopped prices already, says the RAC.

Pump prices are currently hovering around 11p per litre for diesel and petrol, but RAC fuel spokesman Simon Williams believes they should be around 109 per litre, with the most competitive filling stations selling unleaded and diesel for around 106p per litre.

Some motorway services are charging a shocking 127p per litre, he points out, despite the price of oil dropping to its lowest level since the start of May.

FairFuelUK has already this week accused British fuel retailers of “opportunistic and abhorrent” profiteering by not passing on savings, and now the RAC is adding weight to the call for prices to fall.

Staycation surprise

“We would hope that retailers are not taking advantage of public perceptions that fuel prices would rise following the Brexit vote last month,” said Williams.

Giving them the benefit of the doubt, he added: “Retailers have a reasonable recent record of passing cost savings on, and we would like to think this is a blip rather than a new norm.

“With millions of families currently away on holiday or soon to leave, combined with a boom in staycations this year, a cut now would be widely welcomed and would give motorists confidence that retailers are not keeping prices artificially high.”

RAC Fuel Watch data shows the oil price is the biggest factor determining UK fuel prices after fuel duty.

UK fuel prices have risen since winter 2015 when unleaded hit a low of 101.27p per litre, tantalisingly close to dipping below the £1 per litre mark.

Pump prices have risen since then but now the world oil price is dipping, it’s time for fuel retailers to play fair, pleads the RAC.

UK petrol station

Fuel retailers are ‘exploiting motorists for personal greed’

UK petrol stationFuel retailers are paying less for diesel and petrol since the Brexit vote but these savings have yet to be passed onto motorists.

FairFuelUK has thus accused British fuel retailers of ‘opportunistic and abhorrent’ profiteering by not passing on the savings – adding that in some cases, fuel prices have actually risen.

The wholesale cost of diesel has fallen 1.67p per litre since the Brexit vote in June, says FairFuelUK. Petrol is even cheaper: it costs 3.65p per litre less. Despite this, average diesel prices are unchanged and the average price of petrol is up by 1p a litre.

It is independent fuel retailers who are to blame, says FairFuelUK founder Howard Cox. Supermarkets are starting to bring down pump prices but smaller forecourts are not.

“The Petrol Retailers Association should tell Britain’s 37 million drivers why their members appear to be increasing their profits since Brexit. Are they deliberately exploiting market and political uncertainty for personal greed?”

Retail fuel margins have risen nearly 2p a litre since the EU Referendum on 23 June, according to FairFuelUK research. Retail profits are up even more: from 6.23p per litre to 10.66p on every litre sold.

Of course, said FairFuelUK campaigner Quentin Willson, retailers need to make a decent profit, “but failure to pass on these wholesale falls is nothing short of opportunistic and abhorrent”.

Labour MP and Transport Select Committee member Rob Flello went further: “Motorists and professional drivers continue to be ripped off by an industry that hides the true costs of producing our fuels. The new PM has the chance to end this disgrace.

“Of course the fuel industry could voluntarily stop profiteering, but without government intervention there’s no sign of that happening.”