When will the price of fuel drop and what is the estimated price for 2023?

Petrol and diesel costs reached record levels earlier this year as the Russian war in Ukraine played havoc with pump prices.

The uncertainly around fuel costs remains, although the prices have recently dropped slightly from its peak which saw cabbies and other motorists forking out £2 per-litre this summer.

Petrol and diesel rose rapidly due mainly to the ongoing conflict in Ukraine. Russia has been reducing its crude oil exports to much of Europe meaning a lack of supply driving up wholesale prices.

There’s also a pent-up demand for oil since the world awoke from its slumber during the coronavirus pandemic which has pushed up demand and therefore the price.

The huge cost in fuel has seen most taxi licensing authorities already react to the sharp increases. Tariff reviews across the UK have seen increases ranging from 5 to 20 percent in a bid to help cabbies stay on the road and entice more into the industry given the current shortage of drivers in many regions.

While the predicted future cost of gas and electric is well documented the cost for petrol and diesel is less predictable.

Pump prices are very reactive to current events and with no one sure how long the conflict in Ukraine will last, the cost of oil next year is hard to equate. Global and national inflation levels will also impact the future prices found on the garage forecourt.

However, taxi licensing authorities have found themselves in a unique position whereby they must analyse fuel costs, both for the here and now and the future, to work out a fair taxi tariff price.

The most interesting analysis exists in Northern Ireland where the Department for Infrastructure shared their workings out in a ‘Taxi Fare Increase Public Consultation’ report published on 12 August.

In their research diesel prices per litre are predicted to reach an average price of £1.82 for this year and interestingly decrease to £1.53 in 2023.

Whilst this would be a welcomed boost to the taxi industry, and all motorists in general, that predicted figure remains high when compared to pre-pandemic prices sitting on average around the £1.31 per litre mark.