‘DARK DAY FOR DRIVERS’: Fuel prices reach all-time record high
The average price of petrol hit a new record high of 142.94p on Sunday, exceeding the 142.48p a litre all-time peak reached on 16 April 2012.
RAC Fuel Watch data shows the price of unleaded has rocketed by 28p a litre in a year from 114.5p in October 2020, adding £15 to the cost of filling up a 55-litre family car (£63 to £78.61). Diesel is also closing in on a new record with the average now standing at 146.50p, just 1.5p off the high of 147.93p, also from April 2012.
The dramatic hike has been driven primarily by the oil price doubling from around $40 a barrel a year ago to $85 now – but some analysts predict it could hit $90 by the end of the year.
While the jump in the price of oil is the main reason for the new record pump price it is not the only factor. September’s switch to greener E10 petrol has also played a part, as has the margin retailers are taking on every litre sold, which is now greater than it was prior to the start of the pandemic.
On 1 September the bio content of unleaded increased from 5% ethanol to 10%, and as ethanol is more expensive than petrol, it added around a penny a litre to the cost on the forecourt. The bio element of a litre now accounts for 8.5p of the cost prior to VAT in comparison to the pure petrol cost which equates to around 41p. This could easily rise still further as the price of ethanol has gone up by 52% since E10 was introduced.
Duty at 57.95p a litre still exceeds the combined bio and petrol components which amount to around 50p. VAT currently equates to nearly 24p, but this is applied on top of all other elements of the petrol price including duty and retailer margin.
Since April 2020 retailers have increased their average margin on a litre by 2p from around 5.5p to 7.5p a litre. With volumes sold at the pumps plummeting during the first UK lockdown and remaining lower subsequently retailers, particularly the smaller independent ones, are trying to balance the books.
RAC fuel spokesman Simon Williams said: “This is truly a dark day for drivers, and one which we hoped we wouldn’t see again after the high prices of April 2012. This will hurt many household budgets and no doubt have knock-on implications for the wider economy.
“The big question now is: where will it stop and what price will petrol hit? If oil gets to $100 a barrel, we could very easily see the average price climb to 150p a litre.
“Even though many people aren’t driving as much as they have in the past due to the pandemic, drivers tell us they are just as reliant on their cars, and many simply don’t have a choice but to drive. Those on lower incomes who have to drive to work will seriously struggle to find the extra money for the petrol they so badly need.
“We urge the Government to help ease the burden at the pumps by temporarily reducing VAT and for the biggest retailers to bring the amount they make on every litre of petrol back down to the level it was prior to the pandemic.”
The average price of super unleaded is now at 154.58p a litre, drastically increasing costs for drivers whose cars are not compatible with new higher bio content E10 petrol introduced in September which contains 10% ethanol. These drivers therefore have no choice but to use E5 petrol which is now only available at the super unleaded grade.
