You may have thought recently that the price of petrol was starting to creep up again so you can take some small comfort in the knowledge that you were absolutely right. At the end of September the average price of petrol in the UK had risen by almost 5 pence a litre since the end of August.
Unleaded prices seem to have taken the biggest hit with an increase of 4.7ppl to an average of 140.2ppl. Diesel has fared slightly better with an increase of 4.2 pence per litre, but it is still more expensive than unleaded at an average of 144.6ppl.
What is driving the price increases? Sadly most of it is down to speculation on the oil and fuel stock markets, fueled by political unrest in the Middle East and creating the second big spike this year in the oil price. At the end of September oil stood at $109 per barrel, close to the peaks of almost $120 per barrel we saw in 2011, although recent prices have dropped back to $90 per barrel. Will we see a drop in forecourt prices? Answers on a postcard, please.
For the beleaguered motorist it is increasingly difficult to bear the increasing cost of fuel. While businesses can try to economise by buying fuel in bulk or by using fuel cards from UKFuels, the private motorist is faced with the choice of driving less or trying to squeeze every last mile they can out of a gallon. The only problem is that changing gear early, braking less and emptying your boot of rubbish will only do so much to improve your fuel economy.
There is evidence that, as a nation, we are starting to drive less. The Department of Energy and Climate Change reports that between April and June 2012 nearly half a billion fewer litres of petrol and diesel were sold than during the same period last year, despite a fall in fuel prices during that period. Some of that can be accounted for by increasingly economical engines in modern cars, but even then it still points to a shift in driving habits.
Let us not forget the cost of fuel duty. From 23rd March 2011 the duty added to a litre of diesel or unleaded is 57.95 pence. Then remember that you’re paying VAT on every litre too (including on the fuel duty) at 20 per cent. Without tax fuel would cost just 59 pence per litre
You can see why people get so animated about taxation on fuel. The last inflation-linked increase in fuel duty was postponed from August and is not due to take effect until 1st January 2013, taking fuel duty to 60.97 pence per litre. Will that be postponed? We can only hope so but one thing is for sure – the price of fuel is not coming down in a hurry.