Drivers set for post-lockdown nightmare as petrol prices rise 7.5p a litre

Drivers are set to be in for a shock once lockdown eases and they can travel again.

This is because the price of petrol and diesel has soared recently – creating a money nightmare for some.

Analysis of national prices show that unleaded petrol now costs almost 122p-a-litre on average in the UK. This is the highest it has been since the start of March last year.

Meanwhile, unleaded has risen from around 114.5p per litre in December, with the 7.5p rise meaning the average petrol car's fuel tank is now £4.13 more expensive to fill up than it was at the end of 2020.

February's AA Fuel Price Report reveals that average fuel prices on Tuesday this week (February 16) were 121.84p-a-litre for petrol and 124.91p for diesel.

A month ago, these were both 3p-a-litre cheaper and between August and December 2020, petrol was 7.5p per litre less than it is today.

Over the past month, pump price increases across supermarkets and oil company brands have been the same, the AA says.

However, it says both Morrisons and Sainsbury's are charging around 1p-a-litre more for fuel than the leading supermarket, Asda.

It's thought the main driver in the recent price hike has been the fact that oil price surged from $50 (£36) a barrel in December to $64 (£46) this week. This is the highest it has been for 13 months.

The price increase is a combination of oil producer cuts and speculation on increased demand with the coronavirus vaccines rollout.

However, commodity trading in road fuels has been more guarded, according to the AA.

The motoring group said: "In January of last year, oil at $62 to $64 a barrel led to petrol being traded at around $600 a tonne.

"This time, commodity petrol is trading at $570 – the $30 difference equivalent to a 2p difference (with VAT) at the pump."

Last week, Platts reported weak fuel demand across Europe with continuing Covid lockdowns.

This has meant the UK's fuel trade has maintained the higher margins at the pump of last spring when, with tax and wholesale cost deducted from the petrol pump price, retailers were making margins of between 10p and 11p per litre.

Margins of 8p to 9p-a-litre were the norm back in mid-February 2019.

There are also other extra costs for drivers post-lockdown, as hundreds of thousands of people start to go back to work or have to drive to new jobs further away from ones they lost in the pandemic.

There is also possible threat on an increase to fuel duty in the Chancellor's budget statement on March 3.

A 1.6% increase in car fuel costs is also likely with the introduction of E10 fuel later this year, according to the Government's impact assessment.

When you add the fact that councils are putting up the price of parking and residents' permits and half a million car owners in Birmingham (June) and London (October) face the prospect of being priced off the road by emissions-related city access charges, motorists could face escalating car bills.

Luke Bosdet, the AA's fuel price spokesman, said: "As they struggle to get their working lives and family finances back on an even keel after Covid, there is going to be a real sense of being under assault for needing to drive a car.

"The bonus that the fuel trade is giving itself is just part of the financial pressure likely to be heaped on drivers this year – particularly those on lower incomes.

Like what you see? Then fill your boots…

Want to bring a little glamour to your life every day with all the most exciting real-life stories, fashion and even sex tips HOT off the press?

Well, we've got you covered with our great new Hot Topics newsletter – it'll drop straight into your inbox around 7pm and you can unsubscribe whenever you like.

And signing up now means you'll get a front row seat for our great new series inside the lives of the next generation of Daily Star Page 3 girls.

You can sign up here – you won't regret it…

"For the growing number of car owners able to afford electric vehicles and dodge many of these threats, there may be much relief as they take to the road – but "don't look back in anger" will be the one tune they won't be humming any time soon."

Simon Williams, fuel price spokesman for the RAC, added: "With the Chancellor's Budget now less than two weeks away, the last thing drivers, and possibly the economy, need is a fuel duty increase – not least as petrol prices have now been rising for 13 consecutive weeks.

"A hike in duty at a time of rising fuel prices could put unprecedented pressure on lower-income households and might have the negative effect of forcing everyone who depends on their cars to consider cutting back on other spending."

Source: Read Full Article