Latest Petrol Price Study

The RAC Foundation recently published a paper on drivers, cars and fuel in the UK. Tiger.co.uk, popular website for cheap car insurance quotes, has reviewed the paper and highlighted some of the areas of concern for motorists.

According to the figures published by the RAC, 91% of the passenger miles travelled within the UK are in cars, with only 8% on trains and 1% on planes. It might come as no surprise then that almost all of the 35 million drivers in the UK have concerns about the increasing price of fuel and the cost of car insurance.

A breakdown of petrol prices in early September 2012 shows that a huge 58.7% of the price per litre is going to the government in taxes:

COST OF PETROL PER LITRE AS AT 03RD SEPT 2012

£1.3803

COST

%

OIL, FUEL PRODUCTION, SUPPLY AND PROFIT MARGIN

57.08p

41.3%

FUEL DUTY

57.95p

42%

VAT

23.01p

16.7%

The rate of duty on fuel last changed in March 2011 when it was taken down by 1p to the current rate. This positions the UK as having the eighth highest petrol price within Europe and the second highest price for diesel.

The cost of running a vehicle has shot up for drivers in the UK over recent years. Pressure from increasing prices at the pump and the rise in insurance premiums has meant that hard pushed drivers have had to cut back in other areas. Last week, a couple of leading supermarkets announced that they were going to take up to 3 pence per litre off the price of petrol but there is no indication that this will be followed up by a move from the government to freeze, or better still, cut the duty on fuel in the UK.

Across the Atlantic in France however, the French government has agreed with major oil companies to make a cut in fuel prices by up to 6 cents (4.8p) per litre for three months in an attempt to help drivers hit by the recent price increases. The Petrol Retailers Association (PRA), a body representing independent fuel retailers in the UK, has been urging the UK government to follow suit, but it remains to be seen if any action will be taken.

In light of the continuing worries about the costs of motoring in the UK the Office of Fair Trading (OFT) has commenced two initiatives recently with the aim of investigating the underlying issues; a price review on petrol and diesel is taking place to understand whether the reductions in the price of crude oil are being reflected in reductions at the pumps; and the motor insurance industry has been referred to the Competition Commission in the wake of questions about how repairs are being carried out as a result of claims.

Andrew Goulborn, Tiger.co.uk’s Commercial Director, commented: “The cost of motoring is a really hot topic at the moment and with the costs of petrol and diesel looking to set new record highs the situation is continuing to place pressure on household finances within the UK. Drivers can cut costs by following some advice about how to reduce the amount of fuel they use. Things like making sure your vehicle is not too heavily laden, keeping tyres at the recommended pressure and looking out for the best deals at the pumps. As with car insurance, prices vary so it always pays to shop around”.

04/10/2012 10:36:02 Eren
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