Petrol Explodes - Nine Year High At The Pumps

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The average price of petrol hit a new record high of 142.94p on Sunday 24 October, exceeding the 142.48p a litre all-time peak reached on 16 April 2012. Even higher prices could be in the pipeline.

RAC Fuel Watch data shows the price of unleaded has rocketed by 28p a litre in a year from 114.5p in October 2020, adding £15 to the cost of filling up a 55-litre vehicle from £63 to £78.61.

The dramatic hike has been driven primarily by the oil price doubling from around $40 a barrel a year ago to $85 now – but some analysts predict it could hit $90 by the end of the year.

 

E10

While the jump in the price of oil is main reason for the new record pump price it is not the only factor. September’s switch to greener E10 petrol has also played a part, as has the margin retailers are taking on every litre sold which is now greater than it was prior to the start of the pandemic.

On 1 September the bio content of unleaded increased from 5% ethanol to 10%, and as ethanol is more expensive than petrol, it added around a penny a litre to the cost on the forecourt. Ethanol prices could easily rise still further as the price of ethanol has gone up by 52% since E10 was introduced.

 

Tax

Duty at 57.95p a litre still exceeds the combined bio and petrol components which amount to around 50p. VAT currently equates to nearly 24p but this is applied on top of all other elements of the petrol price including duty and retailer margin.

 

Retailer margins

Since April 2020 retailers have increased their average margin on a litre by 2p from around 5.5p to 7.5p a litre. With volumes sold at the pumps plummeting during the first UK lockdown and remaining lower subsequently retailers, particularly the smaller independent ones, are trying to balance the books.

 

“This is truly a dark day for drivers and one which we hoped we wouldn’t see again after the high prices of April 2012. This will hurt many household and business budgets and no doubt have knock-on implications for the wider economy."

-Simon Williams

Spokesperson, RAC

 

150p a litre

“The big question now is: where will it stop and what price will petrol hit? If oil gets to $100 a barrel, we could very easily see the average price climb to 150p a litre," adds RAC's Williams. “Even though many people aren’t driving as much as they have in the past due to the pandemic, drivers tell us they are just as reliant on their cars and many simply don’t have a choice but to drive. Those on lower incomes who have to drive to work will seriously struggle to find the extra money for the petrol they so badly need."

 

Super unleaded

The average price of super unleaded is now at 154.58p a litre, drastically increasing costs for drivers whose cars are not compatible with new higher bio content E10 petrol introduced in September which contains 10% ethanol. These drivers therefore have no choice but to use E5 petrol which is now only available at the super unleaded grade.

Picture: Petrol has hit a new record high of 142.94p after more than nine and a half years.

 

Article written by Cathryn Ellis
27th October 2021

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