Welcome to the new Independent website. We hope you enjoy it and we value your feedback. Please contact us here.

Fuel price rises outstrip savings


Recent rises in petrol prices at the pumps will wipe out any savings drivers could have expected from warmer-weather motoring, the AA said today.

Already at record levels, fuel prices have risen further in recent days, with petrol now at an average of 138.50p a litre and diesel at 145.45p, the AA reported.

Warmer weather and more daylight reduce a car engine's winter workload and improve fuel efficiency by at least two miles per gallon (2mpg).

For a petrol car with an average fuel consumption of 31mpg, or 6.8 miles per litre, a 2mpg improvement adds 24 miles to the range of a 55-litre (12-gallon) fuel tank - equivalent to a saving of 3.5 litres, £4.85 a tank, or 8.8p a litre.

The AA said the 6.25p-a-litre increase in the price of petrol since the start of the year had slashed much of the "summer" saving and the Treasury's 3.624p-a-litre fuel duty increase with VAT, planned for August 1, would "finish the job".

Recent rises have, in the past month, added £1.75 to the cost of refuelling a typical petrol tank and added £2.12 for an 80-litre commercial van diesel tank.

Since the start of the year, £13.27 has been added to the monthly fuel costs of a family with two petrol cars,

Compared to a year ago, an extra £5.78 million a day is being spent on fuel, while compared to March 2010, an extra £23.21 million a day is being forked out for petrol and diesel.

Regionally, Yorkshire and Humberside has the cheapest petrol, at 137.9p a litre. Northern Ireland remains the most expensive at 139.2p.

The dearest diesel, at 145.9p a litre, is in Wales and Northern Ireland. Yorkshire and Humberside is the cheapest for diesel at 144.7p a litre and is the only region offering a price below 145p.

The AA said the "£7 gallon" had at last arrived at a main fuel station, with an M4 service station charging 153.9p a litre for diesel this week.

AA president Edmund King said: "Tax on fuel is not equitable and hits people harder because of where they live and how mobile they need to be.

"Yes, rich car owners with bigger-engined vehicles pay more for their indulgence because of higher vehicle excise duty and fuel consumption, but poorer drivers suffer disproportionately."

He went on: "Those who live in rural areas, those that have had to move further away to find affordable housing or those whose family budget is on a knife-edge because of daily travel costs to nursery school, childminders and work face a greater and unfair burden.

"Rather than pushing ahead with the fuel duty increase, the Treasury would do better to freeze fuel duty and work on a fuel price stabiliser that is relevant to current record prices.

"If not, the Government will see not only more people claiming benefits as rising travel costs discourage work but get less tax as motoring-dependent businesses go bust and lay off workers."

Campaign group FairFuelUK has launched a last-ditch attempt to pressure the Government to scrap fuel tax increases expected to be confirmed in next week's Budget.

FairFuelUK supporters across the UK are being asked to contact their MPs by email to put pressure on the Treasury for a cut in fuel duty and not just another freeze.