The UK Fuel Phenomenon - What Does The Rising Cost Of Fuel Mean For You?
On Monday, the UK average cost of petrol reached record levels, hitting 169.61 pence a litre on Monday according to RAC data.
And while diesel prices have dropped slightly, they remain inflated at an eye-watering 181.87 pence per litre.
This isn’t just a UK phenomenon. The price of gasoline has also surged to a new high in the US, and fuel prices in Europe are also well above the seasonal average.
With wages not rising anywhere near as fast, UK households are feeling the squeeze when it comes to owning and running a vehicle.
So what does that mean for the 12 million drivers across the UK? We’ll explain exactly why fuel costs are rising in the UK, what this means for your vehicle and wallet - and how you can mitigate sky-high fuel costs to save some cash.
Why is the cost of fuel increasing?
Rebounding demand after Covid lockdowns
2020 was the year of empty car parks, airports and staying at home. 2021 was the year where we got to grips with pandemic life, and demand for fuel increased as we began a series of vaccine rollouts alongside unprecedented levels of online deliveries.
While the oil market was already slowing before the pandemic hit, the recent snowballing of geopolitical events has had a significant impact on crude oil and gas supplies.
The Russian invasion of Ukraine in February has threatened supplies from Russia, and low output from renewable energy sources in 2021 has meant fuel prices have soared.
Why are petrol prices going up again?
So why is petrol so expensive? The price of petroleum gas usually follows the trend of crude oil prices, which also remain remarkably high.
The build-up in demand after the pandemic has a lot to answer for, as people rush to get back to normal.
To make up for lost time, so to speak, British people are spending more money on day trips, holidays at home and abroad, shopping and more. Demand is high, but supply is still low.
Curtailed energy supplies and rising fuel costs have also coincided with the spring and summer months, where British people are driving more frequently.
Combine that with a growing labour market post-pandemic, and people are willing to pay any fuel price to drive to work.
How high will UK fuel prices go?
Unfortunately, for vehicle owners, there seems to be no sign of slowing when it comes to fuel prices.
The price of both petrol and diesel could be hiked up even further by a complete ban on Russian energy imports by the EU.
Experts predict that it will take a recession to bring inflated rates back down - and they will continue to rise until that takes place.
We can expect fuel prices to remain elevated for weeks - if not months.
But as with many aspects of the economy, uncertain times lead to unstable prices.
How will the rising cost of fuel affect me?
Higher cost of living
Diesel can be seen as the lifeblood of the economy; without it, the supply chain practically grinds to a halt.
We’ll see the rippling effects of rising diesel costs on the price of fuel, food and other consumer goods.
Essentially, everything that needs to be delivered, whether by train, lorry or plane, can be expected to increase in price.
How can I save on rising fuel costs?
The simple answer is that the less you drive, the less you’ll need to buy fuel. But for most people, that’s easier said than done - particularly if you have to drive to work or drop the kids off at school. But, there are other options. Cycling is a great option. However, there are problems with cycle lanes that need to be addressed.
Use public transport or consider carsharing
If you have the opportunity to use public transport, this might be something you want to consider. Improved hygiene facilities post-pandemic means it’s safer than it has been in a long time.
Otherwise, consider carsharing with family, friends and colleagues. If you’re the owner of an SUV or minibus, it’ll certainly be more comfortable to share.
Reducing the rush for fuel also shortens the distance between supply and demand, which should force petrol and diesel prices down in the short term.
Adjust your driving habits
Did you know that keeping your foot off the brake while driving can save you fuel? Be mindful when accelerating and braking, and consider driving slower or turning off the engine in a queue.
It’s also worth keeping up to date on servicing your car, making sure your tyres are fully inflated and keeping the weight light to use less fuel. The economy efficiency of your car would also play a factor in the amount of fuel used. Here is our list of the best and worst vehicles for the environment.
Opt for an electric vehicle
If you’ve been toying with the idea of switching to an e-vehicle or a hybrid, there’s never been a better time to go green.
While electricity costs can fluctuate, if you’re in a pure electric vehicle and have the option to charge from home, then varying gas and oil prices won’t affect your vehicle running costs. There has been no better time to switch to electric than now!
Think about where to fill up
Prices vary from region to region, and could also be cheaper in a town just a few miles away.
While fuel prices are set to remain inflated, consider filling up at your local supermarket or keeping an eye on local four courts.
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