Average UK diesel price hits new high

According to figures from The AA the average price of a litre of diesel has topped 2011’s May peak of 143.04p, taking it to 143.05p; a new all-time high. The pump price of diesel fell back to 137.59p in July last year before starting to climb again.

To put this in perspective, two years ago diesel in the UK averaged 113.62p/litre. For a van with an 80-litre fuel tank, the cost of filling up has risen from £90.90 in February 2010 to £114.44 currently, having dropped to £110.07 last July.

“A stronger pound has staved off this moment for longer than might have been expected, but diesel drivers across the country will have been watching in trepidation,” said AA president Edmund King. “They hoped that below-record prices would hold until the spring, when winter price pressures on diesel traditionally ease.

“The impact of record diesel prices will be felt by everyone as higher transport costs are passed on to business and consumers. With some delivery and haulage firms adding a diesel surcharge to invoices, costs will rise faster than most people expect and stoke inflation again.”

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There is no price transparency in the wholesale and retail diesel market. The price of diesel has been influenced by refinery closures, unreliable supply into Europe and stock market speculators taking advantage of a tight market, but there is no way to find out whether or not businesses and consumers are paying a fair price.

“It is galling to see Brent crude shoot up from around $112 a barrel earlier this month to nearly $120 now, despite the International Energy Agency’s lower forecasts for oil consumption in 2012,” commented King. “With trouble in the Middle East one of the causes, the pattern of oil pricing is looking to mirror that of last year; inflated, once again, by stock market speculation.”

The AA has written to the Chancellor calling for an investigation into the oil, refining, fuel product and retail markets to ensure UK businesses and families are protected from over-inflated prices and supply difficulties. It has also joined the Freight Transport Association in calling for an end to annual fuel duty hikes while the economy falters (see News Story). This includes cancelling the planned rise in August.

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