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Fuel Sales Drop

Figures have shown that the sale of petrol and diesel has dropped significantly over the few past months. This could very well be due to the increase in petrol prices in the UK, a trend that doesn’t seem to be slowing down. The result of the rising cost of fuel seems to be fewer drivers on British roads, according to a new report.

Some Motorists No Longer Driving

Figures released by the Department of Energy and Climate Change have shown that there has been nearly half a billion fewer litres of diesel and petrol sold this year between April and June than there was during these same three months last year. It would seem that as the cost of fuel increases, demand decreases, as the AA recently reported that some motorists are no longer driving at all.

Really another 3pence Rise?

One of the reasons for the recent increase in petrol prices was the threat of a strike by tanker drivers, a concern that pushed the price up to a whooping 142.5p per litre of unleaded, a record high for the UK . This, in turn, sparked panic buying, which resulted in many drivers not needing to refuel as their tanks were already full; this than prompted in a drop in sales. Since then, the cost of fuel has dropped a little bit, but things still do not look good for motorists. Chancellor George Osborne is also feeling the stress of the planned 3p increase set for January 2013.

Can Family Budgets Afford the Rise?

The AA’s Luke Bosdet says that UK drivers have taken quite a few hits, adding that many can no longer afford the high prices. He went on to say that the UK has seen much instability since 2008, and that the recession has meant that many family budgets can no longer accommodate these higher prices. The only constant is that wages aren’t increasing in line inflation and the rising cost of fuel, says Bosdet, adding that some have no other option than to stop driving altogether.

Diesel and Petrol Wholesale Costs the Same

For the first three or four weeks of the summer, the price of wholesale diesel was the same or even lower than the price of petrol, yet we saw an increase of 5p a litre at the pumps, says Mr Bosdet. The chairman of the RMI Petrol Retailers Association, Brian Madderson, said that independent pump stations are also struggling.

I certainly couldn’t understand why when driving through France and Spain during August the prices of Diesel was lower, (yes lower) than the price of unleaded petrol.

Rural Stations Going

In turn, the number of independent stations is declining, having a huge impact on rural areas, said Mr Madderson. He added that the high taxes, which make up for 60 per cent of the total cost of fuel, are crippling these traders. Today, a tanker of fuel costs over £50,000, more than £30,000 of which goes towards duty and VAT. This must be paid up front by vendors before it is collected it back from motorists, said Madderson.

More Cars in China and Japan

The director general of UK Petroleum Industry Association, Chris Hunt, said that the rising cost of fuel is a result of an increase in car sales in the Chinese and Japanese markets. He added that even such competitive markets provide the most economical pre-tax prices on the continent, however.

Will the Government Help?

Mr Hunt also said that he doesn’t think the government will do anything to lower the 60 per cent tax they take for duty and VAT. A number of big UK oil suppliers are closing their refineries as well as their service stations, he added.


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