Fuel

Petrol prices 'set to increase'

UK petrol prices have for the second month running fallen by more than 4p a litre but fuel duty is due to increase again in August.

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Motor fuels and tuition fees help curb inflation

by - Economics Editor

There's been a surprisingly sharp drop in inflation this morning.

Prices rose by 2.2 per cent in October, down from 2.7 per cent the month before and well below economists' expectations.

Petrol pump
A drop in petrol prices was one of the factors in the unexpectedly large inflation drop last month. Credit: PA

The main reasons were a sharp fall in transport costs, mainly motor fuels (for example a drop of 4.9p in petrol in October), and tuition fees.

The latter of these is a mathematical quirk: education costs rose 8 per cent but this was half the rate they were rising a year ago so the comparison contributes to a lower overall inflation figure.

Prices have been rising ahead of wages for years now. It's likely that that trend will be reversed some time next year but today's easing of inflation may bring the end of the squeeze on incomes a little closer.

Drivers 'spend more on fuel' than this time last year

Around 42% of motorists surveyed shop around for the best petrol and diesel prices.
Around 42% of motorists surveyed shop around for the best petrol and diesel prices. Credit: Lewis Whyld/PA Wire/Press Association Images

Drivers are spending an average of £14.64 more a month on fuel than a year ago, according to a survey.

As a result ,as many as 73% have taken positive steps to improve the fuel efficiency of their vehicles, the poll by Sainsbury's Bank Car Insurance found.

A total of 42% of drivers are shopping around for petrol and diesel, while 39% are driving less, 29% are driving more slowly and 26% are ensuring their tyres are properly inflated.

In addition, 19% have cut down on excess weight in their car by removing any heavy items from the boot before setting off and 17% have made efforts not to leave the engine running when stationary.

The economy measures also include 3% who have started car-sharing with friends, family and colleagues to go to work, while 2% have removed bike and roof racks from their cars.

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AA petrol price warning to holiday motorists

Wholesale petrol costs across Europe have soared Credit: PA

Petrol pump prices could soar by 5p a litre, burning a hole in the pockets of holiday motorists, the AA has warned.

A surge in the wholesale cost of petrol across Europe has already led to a rise in UK petrol and diesel prices, with more misery possibly to come, the AA said.

On average, UK petrol prices have risen from 134.61p a litre in mid-June to 135.78p now, while diesel has gone up from 139.16p a month ago to 140.24p now.

The AA said: "A $100-a-tonne increase in the cost of petrol across north west Europe, combined with a weaker pound, heralds a potential 5p increase in pump petrol costs."

It added that should petrol go up 5p a litre then a family from Hounslow in west London, for example, heading off on holiday in a typical family car to Cornwall will pay £2.90 more for the return trip than it would have done in June.

Petrol pump prices edge higher

The cost of filling up at the pumps has edged up over the last month, with diesel drivers getting a worse deal than those using petrol, according to figures from the AA.

Petrol prices have been edging up over the last month. Credit: PA

The average price of petrol in the UK has risen from 133.35p a litre in mid-May to 134.61p in mid-June, while diesel has gone up from 138.17p a litre to 139.16p.

Northern Ireland has the most expensive petrol, at an average of 135.8p a litre, with London having the cheapest, at 134.61p.

Northern Ireland also has the dearest diesel (139.8p a litre) with London and south west England having the least expensive (139.1p).

The AA said the slight rise in average petrol prices nationally represented "something of a lull" after the 8-10p swings in prices over the last 12 months.

Petrol sales suffer 'huge drop'

Petrol sales have plummeted in the last five years, the AA have said.

In 2007, forecourts sold 22.87 billion litres of petrol but the annual figure had slid to 17.42 billion litres by 2012, Government statistics have highlighted.

Petrol sales have dropped in the last five years, the AA have said. Credit: PA

Diesel sales, though, have risen slightly over the last five years, going up from 14.80 billion litres in 2007 to 16.73 billion litres in 2012.

Looking at the most recent years, the figures showed that the 2012 petrol total of 17.42 billion litres compared with 18.27 billion litres in 2011.

Diesel sales rose from 16.24 billion litres in 2011 to the 2012 figure of 16.73 billion.

Taking petrol and diesel sales together, fuel stations sold 37.67 billion litres of fuel in 2007 but only 34.16 billion litres in 2012.

The AA said that the decrease was equivalent to 35 days of fuel sales being lost since the start of the credit crunch.

Read: Petrol price rises again

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Fears UK could see 'most expensive petrol ever' by Easter

The falling pound and stock market speculators are driving up the cost of petrol, according to the AA. The price of petrol at the pumps has gone up a further 1p in the last five days.

The AA says that in little more than a month the cost of filling up an average saloon has gone up by more than £4 and it has been predicted that by Easter we could be seeing the most expensive petrol ever.

ITV News Correspondent Emily Morgan reports:

Labour: Millions will worry over petrol price increase

Millions of people who are already feeling the squeeze will be worried about how they can afford this latest rise in the price of petrol.

George Osborne must use next month’s Budget to cancel his tax cut for millionaires this April and instead help people on middle and low incomes struggling with the rising cost of fuel and food.

A temporary VAT cut would help to kick-start the economy and take 3p off the price of a litre of fuel right now. And a new lower 10p starting rate of tax, paid for by a mansion tax, would help 25 million people on middle and low incomes.

The Chancellor must finally act in the Budget to support families feeling the squeeze and boost growth and jobs in our flatlining economy.

– Cathy Jamieson, Labour’s Shadow Treasury Minister

Why is the price of petrol increasing?

by - Economics Editor

There are a lot of things pushing up the prices of petrol. Paradoxically it might be one of the things the Bank of England is doing to try and stimulate the economy, which is partly to blame.

The reasons behind the increase in oil price. Credit: ITV News

We know that it is mulling more quantitative easing (QE) and one of the side effects of QE is to weaken the pound against other currencies.

The pound has lost about a tenth of its value against the US dollar since last spring.

Oil is priced in US dollars, so that means it is more expensive for us Brits to buy it. At the same time the actual price of oil has risen sharply in the first six weeks of this year, that is partly to do with Middle East unrest and problems in Iran.

That has been building up into wholesale prices which are yet to feed through to the forecourts, which means more pressure yet to come for the companies that use fuel, like haulage companies and also hard-pressed motorists.

Osborne 'taking action' on petrol prices

Chancellor George Osborne has said that petrol remains 10 pence cheaper than it might have been under Labour despite the price of petrol at the pumps has going up a further 1p in the last five days.

"I completely understand the pressure on families, that's why we've taken action to make sure that petrol is 10p per litre cheaper than it would have been if we'd stuck with the tax rises of the last Labour government."

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