16.10.08 Weak currency to blame for motorists paying 5p more at the pumps
Is £1 a litre still too much for unleaded?
UK motorists are paying up to 5p more at the pumps because of the weakness of the pound against the dollar, PetrolPrices.com has discovered.
If the exchange rate was still $2 to the pound, petrol retailers would have room to drop the price of unleaded to just 95p a litre*. That would save the average motorist £10** a month.
However, as a result of the weaker pound UK retailers are paying as much as £6 more for a barrel of oil.
Britain buys its oil in dollars, but because our currency is worth less than in recent times, our pounds don't buy as much as they used to. £1 now buys $1.7, but just 3 months ago we could buy $2 with £1.
The Prime Minister Gordon Brown has today criticised petrol stations for not dropping their prices quickly enough in response to falling oil prices.
He said: "It is encouraging that we have seen petrol prices fall in the UK in recent days, with some supermarkets and retailers reducing their prices below £1 a litre. But I would like to see other retailers following that lead."
PetrolPrices.com supports his comments, but he appears to have overlooked the government's role in reducing fuel prices.
The exchange rate is effectively an assessment of the strength of the UK economy by the world markets. The government is playing a vital role in this with its response to the banking crises.
PetrolPrices.com is concerned that the full implications of the bailout plans won't become apparent until it's too late. Our currency is weakening as world markets lose faith in the strength of our economy, relative to the US. This means we pay more for fuel. We're getting a raw deal compared to Americans - not even accounting for our higher fuel taxes.
Nationalising the losses and privatising profits needs to be avoided at all costs to preserve a strong pound and cheaper fuel, but it seems that that's the route we're going down. If this keeps happening we could see massive inflation next year, sending the price at the pumps up again.
Do you think that the government needs to do more to preserve our currency? Do you think the pound will get weaker? Are you surprised that we pay more for fuel than the US even before tax?
*Based on: GBPUSD: 1.998, Oil: $145.16 (14/07/08) and GBPUSD: 1.7208, Oil: $73.5 (16/10/08)
**Based on 55 litre car filling up 4 times a month.
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What utter complete rubbish, claptrap and horse----. The big 4 will come up with any excuse in the book to keep on ripping British consumers off. Look at the currency exchange rate verses the dollar in May 2007 (Yes, May 2007!!) when the petroleum price on both sides of the Atlantic was the price is it today (it dropped to $67 a barrel today in London and New York) and see just how much more they are charging today. We should be paying no more than 89p a litre for unleaded and 95p a litre for diesel and even those prices are disgusting. Look how much the prices of diesel and unleaded have come down in recent days in France, Germany, the US and the rest of the world. With Gordon Brown with his absurd taxes on one side and the big 4 petroleum companies on the other, we continue to pay through the nose.
AGREED, RIP OFF BRITAIN!
im pleased some brits still make sense. I totally agree with you Don T britain is getting worse as the years keeps going forward on ripping the nation off. We should be only paying no more then 89p/L but as you said gordon Clown ow i mean gordon brown just thinks about his pocket and his MP's pockets. did you know that gordon clown gets paid 2million ayear for what he does which no one ever needs and his MP's get paid on average 500-1million per year why not give each and every one of them the min wage and help thoughs that need it.