Monday 29 April 2013

British squeezed out of driving cars

UK Petrol sales slump to 23-year low as drivers suffer sky-high prices on the forecourts
  • British drivers are cutting back on petrol to record levels because of prices
  • Retailers' profit margins increased by 57 per cent over last four years
  • Typical insurance policy has also doubled in price since 2008

28 April, 2013

Petrol sales have fallen to their lowest level since records began, due to soaring prices.

Consumption at forecourts across the country fell to a new low of 1.37billion litres last month, according to the AA.

This represents a drop of 56million litres since February and marks the lowest level of consumption since January 1990.

Many motorists have swapped gas-guzzling cars for smaller, more economical models in a bid to cut their fuel bills.

Motoring experts believe the increasing cost of running a car has also forced many drivers to switch to public transport or use their car less.

Luke Bosdet, from the AA, said speculators betting on petrol price movements are to blame for pushing up petrol prices.

He said: ‘It’s a completely daft situation. Europe has got more petrol than anyone knows what to do with but petrol is still unaffordable for many drivers.

People just can’t afford these prices. Our research shows two thirds of people are using their cars less or cutting back elsewhere to compensate for higher prices.’

In a bid to attract cash-strapped motorists, supermarkets have started a petrol price war with the cost falling from 136p a litre to 134p in recent days.

Supermarkets Tesco, Asda, Sainsbury’s and Morrisons have all slashed prices at the pumps for the second time in a few days because of a drop in wholesale fuel costs.

But petrol still costs 2p a litre more than at the start of the year, with prices soaring over the past three years by more than 10 per cent from 121p a litre.

One piece of welcome news for drivers is car insurance premiums are falling, with a 4.1 per cent drop over the past 12 months, according to the AA.

But a typical annual comprehensive insurance policy has still doubled in price since 2008 – to nearly £750.

Earlier this year the Office of Fair Trading ruled out a full inquiry into the petrol price market.

MPs and motoring groups accused the OFT of a ‘whitewash’, when it said the market is ‘working well’ even though drivers paid a record average price of 135.8p per litre of petrol last year.

The watchdog blamed this mostly on tax rises and the higher price of oil. It said it found ‘very little evidence’ that retailers are profiteering at the expense of consumers.

Despite this the OFT found that petrol retailers have seen their gross profit margins increase by 57 per cent over the last four years – this works out at 11p for every litre sold, compared with 7p per litre in 2008.

Struggling consumers: Pricing watchdog blamed the costs on tax rises and the higher price of oil

The Chancellor froze fuel duty in the Budget, cancelling a rise planned for September – although Treasury documents revealed the rise was only due to be 1.89p, not the 3p widely anticipated.

The decision comes after sustained pressure from motoring groups and backbench Conservative MPs, who have argued the high oil prices of the past few years were already making motoring prohibitively expensive.

Duty on a litre of unleaded petrol or diesel will remain at 57.95p until at least September 2014.

Motoring lobbyists have argued the Government already imposes too high a tax burden on drivers.

The VAT rise in 2011 increased the total tax take on fuel to about 60 per cent of the pump price, or 83p on the average price of £1.38 for a litre of unleaded.

No comments:

Post a Comment

Note: only a member of this blog may post a comment.