Average UK petrol prices have risen 4.98 pence per litre between mid May and mid June, the second highest increase ever, according to the latest AA Fuel Price Report. This rise is only two-thirds of a penny short of the 5.61 pence per litre record – at the same time last year.
The average cost of petrol across the country now stands at 102.66 pence per litre. This compares with 97.68 last month and 118.16 in mid June last year. The average price of diesel has risen 1.36 pence since mid May to 104.85.
The 4.98 pence per litre increase means that:
- the cost of refilling a typical 50-litre fuel tank has gone up £2.49 in the past month
- a family with two petrol cars is spending £10.80 more per month on fuel than in mid May (£211.81 – £222.61)
- potential UK consumer spending is haemorrhaging an extra £3,216,196 a day to the higher cost of petrol, compared to a month ago
Despite the petrol gloom, diesel car drivers have seen the average price difference with petrol shrink to 2.19 pence, compared to 13.4 this time last year.
Comment
At a time of recession, seeing petrol prices rise almost as fast as they did last summer is a bitter pill for UK drivers to swallow – many of whom have lost their jobs, had their pay frozen or have seen savings income collapse with falling interest rates.
Last year, huge demand for oil and fuels from China and other developing countries incentivised the stock markets to drive up the price of oil. This year, with hints of ‘green shoots’ and collapsed demand barely beginning to find its feet again, market speculators are again gambling on future oil demand that could turn out to be a fiction. So far they have managed to double the price of oil from a December low of $35 a barrel to more than $70 now.
As higher fuel prices siphon money out of their pocket and undermine their ability to spend on the high street, to the average UK driver this is looking like another summer of petrol price madness. If we continue to see fuel prices at these levels the Chancellor should abandon all plans for the 2p tax increase in September as that would further dent economic recovery.
Research from the AA/Populus panel of 15,000 drivers shows that sections of the motoring public are already cutting back: skilled service and manufacturing workers have already reduced consumer spending, use of their cars or a combination of the two more than they did in November, at the time of collapsing banks.
As well as the EU Competition Commission’s review of the transparency of oil, wholesale fuel and pump prices, we are also watching the progress of a bill in the US Senate on the regulation of energy commodities. The Chancellor of the Exchequer, G8 energy ministers, the Kuwait oil minister and market observers have warned of the danger of rising oil prices undermining recovery from recession so far to little effect.
Across the UK, supermarkets Asda and Morrisons have managed to keep their price of petrol below the psychologically-important £1 a litre threshold, but probably not for too much longer. The glut of diesel across Europe, due to depressed industrial activity and transport, has kept pump prices from rising as fast as petrol. At some UK fuel stations, petrol and diesel prices are level-pegging for the first time since June 2007.
At 103.2 pence per litre, the South West now shares Northern Irelands position as the most expensive regions for petrol in the UK, the North the cheapest 102.3. Northern Ireland has now lost its place as the cheapest area for diesel to the North West and Yorkshire/Humberside, 104.1 pence per litre, while East Anglia is the most expensive at 105.5 pence per litre.
