Prices rose 7 per cent in March, according to the latest government inflation figures showing the pain that UK consumers are experiencing. This is the highest inflation rate since 1992, which has led to record increases in petrol and diesel prices, making it even more difficult for hard-core drivers.
According to the Office for National Statistics, the average price of petrol in March 2022 stood at 160.2 pence per liter, compared to 123.7 pence per liter a year ago. It says the average price of diesel in March 2022 was 170.5 pence per liter, with both petrol and diesel prices at record highs. “The 12-month rate for motor fuels and lubricants was 30.7%, the highest since the historic model series began in January 1989,” ONS said.
According to RAC Fuel Watch, the average price of petrol and diesel pumps in the UK increased by 11p and 22p per liter in March 2022, respectively.
On March 22, petrol reached a new record high of 167.3p per liter and the month ended at 163.28p. Diesel, meanwhile, averaged 179.9p per liter on March 23 and ended the month at 177.29p.
These prices mean that it costs 89.80 to refuel a typical 55-liter family car with gasoline – £ 21.93 more than a year ago. The same car now costs 97.51 pounds of diesel – মাস 27.84 more than 12 months ago.
The Chancellor’s recent spring budget statement reduced fuel tariffs by 5p per liter, unfortunately on a day when oil prices rose by $ 6 (£ 4.57) per barrel. This and the fact that retailers did not save fairly to consumers means that the change has reduced petrol and diesel prices by 3.73p and 2.61p, respectively. Rising wholesale oil prices have been driven by the invasion of Ukraine and sanctions on Russia.
“March 2022 will be one of the worst months for pump prices in the history books,” said RAC Energy spokesman Simon Williams. “For 22 years we have been monitoring pump prices as part of our Fuel Watch initiative, we have never seen such an extreme rise in prices in such a short period of time.
“Describing the current situation facing drivers in the forecourt as ‘dark’ is therefore a trivial matter.” He added: “If the Chancellor were to temporarily reduce VAT on fuel instead of fuel tariffs, as we have asked him to do, it would have an immediate effect on the price of the pumps to the benefit of the drivers. Can’t. “
Why are diesel and petrol so expensive?
Russia is one of the largest producers of oil and gas in the world, so any interruption in its production process has a global impact.
Russia has launched a full-scale invasion of Ukraine and is facing international sanctions, with significant disruptions to supplies. Russia produces 4.5 million barrels of oil per day, and Saudi Arabia alone produces more.
So far, sanctions against Russia have targeted banks and alligators, rather than the country’s energy sector, but factors such as the suspension of Germany’s Nord Stream 2 gas pipeline will affect the energy market as a whole. Russia’s economic sanctions have the potential to reduce oil exports to Europe, and experts suggest that Saudi Arabia’s oil fields could fight to increase production enough to counter such measures.
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“OPEC, the cartel of oil producers, is already struggling to meet its output targets as demand for crude rebounds following the relaxation of lockdown restrictions. This has pushed up prices, with analysts warning that there is limited potential to increase supplies if Russia is affected by the embargo, “the Financial Times reported.
What is the price of fuel in the UK?
Fuel prices can be divided into three parts; Taxes imposed by the government, the cost of mining, refining and transportation, and the profit margins of energy companies.
For petrol, diesel and bioethanol, the government receives about 65 percent of the total expenditure through fuel duty and value added tax (VAT). Fuel tariffs represent a fixed price for fuel – it stays the same no matter how much the overall oil price fluctuates. Currently, the Treasury adds 57.95 pence per liter of fuel through fuel tariffs and another 20 percent through VAT. How much VAT you pay depends on how much fuel you are buying.
The second largest part comes from the wholesale cost of fuel. Wholesale costs are the exchange rate, global oil prices and even the combination of domestic supply and demand.
When will the price of fuel go down?
Experts predict that high fuel costs will stay with us for the foreseeable future, and not just for the Ukraine crisis – energy costs have been high for the best part of the year, with demand rising as the world emerges from the lockdown.
Part of the problem is that relatively low barrel prices in recent years have stalled plans to drill for new reserves. This is true in Africa, the United States and South America, and while the current high prices may increase interest in exploring new reserves, it may take years for new wells to flow in the amount needed to influence the market.
Why is supermarket fuel cheaper than an independent forecourt?
Supermarket forecourts usually offer cheaper fuel prices and hold market supermarkets because of this. Companies like Asda, Tesco, Sainsbury’s and Morrisons are in competition with each other, so they keep fuel prices as low as possible in the hope that when motorists come to fill their tanks, they can also do their weekly grocery shopping.
There are constant rumors that supermarket fuels have less additives and are of lower quality than traditional forecourt fuels, but there is less hard evidence of this. All fuels sold in the UK must comply with motor fuel control standards.
Why so much fuel on the motorway?
Motorway fuel stations argue that the reason they are more expensive is that many of them are open 24 hours a day and offer more services than regular forecourt. Motorway fuel stations also charge higher fares for the buildings they operate
In more remote areas, fuel is often more expensive due to higher transportation and supply costs, but this does not apply to motorway stations, according to RAC Fuel spokesman Simon Williams: Much more expensive. In fact, it’s much easier to get fuel from urban filling stations than from the delivery point of view. “
Why is the price of diesel higher than petrol?
Although diesel and petrol are taxed at the same rate by the Treasury, historically diesel is more expensive than petrol, as domestic refineries have struggled to meet demand. This has forced the UK to import diesel at a higher rate than petrol from other countries. In addition, diesel prices are driven by the cost of the additions that go into fuel.
In addition, the gap between petrol and diesel prices in the UK widens in winter. The end of the US “driving season” means retailers have extra petrol that they can’t export, so they sell here at lower prices. Demand for diesel, meanwhile, is growing across continental Europe, where the fuel is commonly used to heat oil.
Recently, the flow of cheap diesel from countries like Saudi Arabia has turned around, the wholesale price of diesel has come close to that of petrol and the price of pumps has come down. However, the fact that we get a higher percentage of diesel from Russia than petrol means that the advantage is reversed.
What is your opinion about fuel prices in the UK? Can we pay too much for our petrol and diesel? What do you do about it? Join the debate in our comments section below …