Drivers spent an extra £40 million on fuel in October compared to September

Oil prices have dropped 11% since the beginning of October, leading to a reduction in wholesale prices of fuel, but it has taken some retailers until the 8th November to pass those savings on to the customer. In fact, until 6th November, only one of the big four retailers had lowered their petrol prices, with the other three actually increasing prices slightly.

This led to statements from motoring organisations saying that “every motorist should feel aggrieved”.

Price reductions

The price of oil has fallen from $84.73 to $75.55 in the past six weeks, the direct result of which is a reduction in the wholesale cost of fuel, which should equate to around a 3ppl saving over current petrol prices, and yet three of the big four retailers – Tesco, Morrisons and Sainsbury’s had failed to acknowledge those savings, according to the RAC.

Asda, on the other hand, has already dropped their petrol prices, and introduced a nationwide price cap throughout their sites, meaning that the maximum anyone will pay is 122.7 pence per litre for unleaded, regardless of geography.

Simon Williams, an RAC spokesperson said: “Every motorist should feel aggrieved that the price of a litre of fuel has remained constant throughout October, when it should have fallen by 3 pence”, but perhaps the RAC were a little premature with their statement, given that the large retailers have finally released statements regarding the lowering of fuel prices.

Whilst Asda have already lowered their prices by an average of 2.4ppl, the other three supermarkets have released statements declaring that they’d be cutting ‘up to 2ppl’ from their petrol prices.

Diesel still seems to be staying at higher prices. Mark Todd, co-founder of leading price comparison service, energyhelpline said “When diesel and heating oil prices rise, energy prices tend to follow. The biggest factor that pushes up household energy prices is the price of natural gas which is up around 50% this year. No wonder we are seeing price rises right now. The biggest factor pushing up the price of diesel and heating oil is the oil price which has also been on the rise. While the oil and gas markets are not identical they tend to follow similar patterns driven by global supply and demand and similar producers eg. Russia, Saudi Arabia and the oil giants like Exxon and Shell. So when one goes up don’t be surprised to see the other follow.”

A look at the past month

Ashley Beach, Data Analyst at PetrolPrices said: “From our data we can see that in October there was no change in the average price of unleaded at 131.2ppl, equalling the average price in September. However unleaded did see approximately a penny rise from the start to the middle of both months, and then a decline back to the starting price at the end of the month. Jet saw the largest drop of 0.7ppl in their average price of unleaded, followed by Sainsbury’s with a drop of 0.4ppl.

Meanwhile, the average price of diesel increased by 2.1ppl to 136.4ppl in October and reached an average high of 137.1ppl. For the average diesel car performing at 62.2mpg, that does on average a mileage of 842 miles per month would have cost the driver an extra £1.30 compared to the fuel they spent in September.

However, compared to January this year this saving would be £7.26. As stated before Jet had the largest decrease in unleaded, however, this is contradicted by the fact that they had the largest increase in the average price of diesel of 2.6ppl.

Using the fact that 30.4 billion litres of diesel was sold in 2017 in the UK and this increased by 1% from 2016, we estimate there to be roughly 30.7 billion litres sold in 2018. This averages at approximately 2.56 billion litres a month, with the assumption that each month an equal amount is sold.

PetrolPrices estimated how much more the UK spent on all fuel in October compared to September by brand, using the statistic from the RAC that says 47.2 billion litres of fuel were sold in the UK in 2017, assuming that this statistic will stay the same for 2018 as it has been roughly this for the past two years. We also assumed that each month an equal amount of fuel would be sold. Totalling all of these estimates up, we produced a final figure of £48,515,654.24 proving that motorists spent over £40 million extra on filling up in October compared to September.”

Frozen fuel duty

Last week’s budget brought further relief to the motorist after last month’s high prices– it was announced that fuel duty would be frozen for the ninth consecutive year, and while many motorists still feel that a reduction in fuel duty is the only way forward, we have been conditioned to believe that a freeze in duty is acceptable, perhaps even favourable.

This comes just at the right time, after a long summer of high prices, it seems that the motorist is finally going to get some relief at the pumps, albeit around £1.92 on an average tank of fuel. With that said, all four supermarkets (Tesco is Britain’s largest petrol retailer) will be going head-to-head in a price war, so prices could still yet drop further, even more so if there’s an Asda in the locale.

There are ways that you can benefit further still; as a member of PetrolPrices, you’ll already be aware that you could be saving around £220 each year on your fuel costs, but keeping an eye out for promotions through the supermarkets could save you a further 10ppl, and ensuring that your car is in good mechanical condition would save you further monies still.

Should the ‘big four’ have discounted their fuel at an earlier date? Do you think we can expect to see further discounts at the pumps in the last part of the year? Or will prices increase again? Let us know in the comments.