By Daniel Hunter
Both petrol and diesel pump prices in the UK have started the new year with a more than 1p-a-litre increase over the past fortnight, according to January’s AA Fuel Price Report.
While average petrol prices are 4p shy of the all-time high, diesel is within 1.5p of the record.
A litre of petrol now averages 133.54p a litre, compared to 128.14 a year ago (2010, mid Jan: 111.80p). Diesel, now at 141.90p a litre, cost 132.53 a year ago (2010, mid Jan: 111.91p).
A 7% rise in the NW Europe wholesale price of petrol and a weaker pound in early January points to a further 1p rise. If it happens, a 2p rise this month will add £4.25 to the monthly (£51 / year) cost of a family with two petrol cars and wipe out much of the savings from recent cuts in domestic energy bills.
Last month’s fall in the inflation rate to 4.2% was in part due to a half penny fall in the price of petrol and diesel in December. However, it masks the fact that petrol prices are around 20p a litre and diesel 30p a litre higher than in 2010, with wage rises failing to keep pace.
Inflation figures could have been even better had the 5p-a-litre fall in the wholesale cost from the middle of September, when UK petrol averaged 135.9p a litre, been passed on more widely. In the end, falling prices bottomed out at 132.3p at the turn of the year.
“The irony won’t be lost on hard-pressed drivers and MPs with mailbags full of pump price anger that regulator oversight of gas and electricity wholesale prices has pressured suppliers to produce quick and significant price cuts. Drivers and businesses also need wholesale and pump price transparency urgently,” says Edmund King, the AA’s president.
“This need could come into sharper focus with the rural fuel duty relief scheme, which came into force on 1 January with a 5p-a-litre rebate on petrol and diesel in the Inner and Outer Hebrides, the Northern Isles, the Islands of the Clyde and the Isles of Scilly. Without fuel price transparency, there is no way for drivers to tell whether the full rebate is being passed on or whether retailers or suppliers inflate their margins to take advantage."
Join us on