Mon, 4 July 2022 at 12:43 pm
Motorists are being hit by soaring fuel prices in the UK, sparking protests on a number of motorways and roads on Monday.
Demonstrators staged a series of “go-slow” protests on Britain’s roads as they call for a cut in fuel duty amid the ongoing cost of living crisis.
The average price of a litre of petrol at UK forecourts reached a new high of 191.5p on Sunday, according to data firm Experian. The average price of diesel was 199.0p per litre.
Soaring gas and oil prices, exacerbated by Russia’s invasion of Ukraine, have put pressure on governments to intervene.
In March, chancellor Rishi Sunak cut fuel duty by 5p per litre in a bid to bring down prices for drivers.
However the most has had little to no effect on prices at the pumps, with retailers criticised for not passing the reduction on to customers.
Last month, figures showed that UK inflation — the rate at which prices increase — had reached a record level of 9.1% in May, the highest it has been since 1982.
Fuel costs have been rising this year because the wholesale price for crude oil, use to make petrol and diesel, has increased.
Demand for energy dropped dramatically at the beginning of the coronavirus pandemic in 2020, but since life has started to return to normal, the demand has surged, leaving suppliers struggling to meet it, and prices have gone up.
Russia’s invasion of Ukraine led to sanctions and import bans on its products which drove up oil prices, increases that have been passed on to the pumps.
How do fuel prices in the UK compare to EU countries?
According to the latest complete figures from the Department for Business, Energy and Industrial Strategy (BEIS) and the European Commission’s Oil Bulletin, dated to 30 June, eight of the 27 countries in the EU have a higher average price per litre of petrol than the UK.
The UK had an average cost of 165.1p per litre at the end of last month, the data shows, making it more expensive than 19 EU nations.
The most expensive petrol is in Finland, where it costs 191.1p per litre on average, followed by Denmark on 188.1p, Greece on 186.7p and the Netherlands with 184.5p.
The UK’s diesel prices are among the worst in Europe, with only two EU countries recording higher rates.
Diesel cost 179.7p per litre in the UK at the end of the month, the figures showed, cheaper only than Sweden and Finland with 190.9p and 189.8p respectively.
What is the breakdown in the cost of a litre of unleaded petrol?
According to the latest figures from the RAC, which records the average retail price of a litre of unleaded petrol in the UK at 191.53p, 44% of the cost – or 84.47p – is made up of tax.
The cost of a litre of petrol is broken down as follows:
Wholesale petrol – 78.81
Bio content – 12.67
Delivery & oil company – 1.70
Retailer margin – 13.48
Fuel duty – 52.95
VAT at 20% – 31.92
Retail price – 191.53
Total tax – 84.87
Tax as % of average retail price – 44%
Will fuel prices go up further?
Last week, Sunak said he would consider calls for a “more substantial” fuel duty cut in the face of soaring petrol prices.
Industry figures have called for further intervention.
AA president Edmund King has described forecourt prices as “pump fiction”, arguing they do not reflect wholesale prices.
He said: “Pump prices are now more like ‘pump fiction’ as they don’t reflect the general downward trends we have been seeing in wholesale prices. This is now an urgent situation.
“The prime minister has hinted at action but we need more than hints.
“Pressure to force price transparency and a cut in duty would be a step in the right direction.”