Petrol and diesel prices in the UK have soared – but exactly what makes up these high prices and why are they rising?
Driving a car has never cost so much with the price of petrol hitting an all-time high this week of more than £1.40 a litre – and there was no
reprieve for hard-pressed motorists in the Budget.
The cost of petrol now averages 140.20p a litre, with diesel at 146.72p a litre. And in August, another rise will add 3.62p a litre, meaning the
typical 50-litre petrol refill will cost £1.81 more, the AA calculates.
However, petrol hasn’t always been this pricey. Five years ago it was just 89p for a litre of unleaded – and even in May 2009 the price was below £1 a
litre, according to comparison site PetrolPrices.com.
It now cost drivers more than £68 to fill up a 50-litre tank – £3.45 more than it cost a year ago £12.30 more than in 2010. Meanwhile, larger cars and
vans cost up to £100 a tank, says the AA.
What makes up the price of petrol?
According to Whatprice.co.uk, the forecourt price makes up just 5% of the total cost of petrol, while the cost of oil amounts to a further 32% - but
of course it’s taxation that eats up the largest chunk, at a hefty 63% of the price you pay to fill up your car.
At 139.67p a litre, the cost of a litre of petrol breaks down into: 57.95p fuel duty, 23.28p VAT, 52p wholesale, 1.5p biofuel content – with just
4.94p the retailer’s margin and transport costs.
Conor Faughnan, director of policy for the AA, is urging the Government to look at the impact of rising taxes on fuel costs, with no sign of these
abating.
“Ratcheting up taxes on fuels, which has been Government policy since October 2008, would be a bad idea for most countries but even more so for us
given our dependency,” he said. However, this week saw a “Budget Blow-Out”, with the decision to press ahead with the fuel increase in August.
"The hardship imposed on the consumer and on family budgets ... is extremely serious. We get calls and emails daily from people in near despair
because of it. But it is also doing considerable damage to the economy,” He added.
[Related feature: How to find the cheapest petrol and diesel prices]
What are the prime drivers of the rising price?
Aside from rising taxation in recent years, a combination of oil price rises and turmoil in the Middle East is behind price hikes.
Signs of an improving US economy are also a factor in driving oil prices to post-recession highs. Brent crude, which is used as a benchmark for petrol
prices in Europe, has been as high $128 a barrel - its highest level since the financial crisis brought the price crashing down in 2008.
However, Phill Jones, commercial director of Motors.co.uk says that while there are major issues around inflating oil prices, the Government “needs to
avoid compounding the issue further with additional tax rises – although they failed to do this in the Budget”.
Meanwhile, the he RMI group of 6,000 independent fuel retailers, warned that a further 4.5p rise could be on the way even sooner – with the price of
petrol reaching 142p and diesel 150p as soon as Easter.
Brian Madderson, who leads the RMI petrol organisation, said: "The weakening of the pound against the dollar, the stand-off with Iran, and the
financial trouble at refineries such as Coryton are all causing major problems. The prospects don’t look great.”
Not only is the rapid rise in the price of fuel causing problems for the economy, but last month it saw a 20% increase in call-outs to motorists
stranded in cars with empty tanks. In February this year, the RAC says that it received 4,780 calls from drivers who had run out of petrol, up from
3,900 a year earlier.
David Bizley, from the RAC, puts the rise down to “motorists trying to drive on empty” because of the cost of filling up.
What do people pay elsewhere?
Considering the UK, Yorkshire and Humberside are the cheapest regions for petrol, at 137.9p a litre, while Northern Ireland remains the most expensive
at 139.2p.
If you’re going further afield into Europe, Spain is one of the cheapest countries, according to the AA. There, petrol is 120.06p a litre while diesel
is 115.05p – and the lower prices are down to rock-bottom tax rates compared to the UK. Meanwhile, in Estonia motorists pay 107.47p for a litre of
petrol, while diesel is 113.30p.
“A lot of European countries have lower taxes on petrol - and diesel in particular, which is incentivised for environmental reasons,” explains a
spokesman for the AA. “This is considered a quick-fix for lowering levels of CO2.”
However bad things are in the UK, be glad you’re not in Norway where petrol costs a wallet-crunching 164.28p a litre and diesel at 153.25p.
Meanwhile, petrol in most US states is around 60p a litre – but this is expected to rise given the pressure on oil.
What's to debate? You've listed facts and quotes, and there is nothing we can do to not pay the pump prices. Whining about t is getting us nowhere, and we need action. Thing is, the last arranged blockades and protests were a flop, a year or s ago.
That's why I run my Passat on Veg oil!
quote:
Originally posted by MakeEverything
What's to debate? You've listed facts and quotes, and there is nothing we can do to not pay the pump prices. Whining about t is getting us nowhere, and we need action. Thing is, the last arranged blockades and protests were a flop, a year or s ago.
we really are soft mugs 
quote:
Originally posted by PSpirine
That's why I run my Passat on Veg oil!
Interesting places to live
10. Algeria: Algiers — 20p per litre
Algeria is one of the Africa's biggest oil producers turning out an average of 1.2 million barrels a day. This flood of oil has pushed down
petrol prices in the country to 20p per litre, more than six times cheaper than the average pump price here in the UK.
The country's petrol supplies also played a vital role in the recent battle against Colonel Gaddafi in neighbouring Libya. With petrol production
in the war-torn country running dry, rebel fighters relied on smuggled fuel from Algeria to power the final push against the corrupt dictator.
Hurrah!
9. Oman: Muscat — 20p per litre
Oman's petrol prices also stand at just 20p per litre. Like Algeria, the Arabic state is drenched in oil, stepping up production in the last six
months to 878,000 barrels every day.
8. Egypt: Cairo — 19p per litre
Egypt is something of a transport hub when it comes to petrol. The Suez Canal — a vital supply line running across the east of the country — carries
an estimated one million barrels of oil from the Persian Gulf every day.
That's why at the peak of the country's revolution against former President Hosni Mubarak, oil prices began to climb, amid fears that the
unrest would interfere with the Suez supply route.
But while this oil price rise pushes up petrol costs here in the UK, the rate petrol is sold at the pump over in Egypt remains relatively low, at just
19p per litre. But with the country's government still anything but stable, it's anyone guess as to how long costs will stay this cheap.
[See also: UK supermarkets cut petrol prices]
7. Qatar: Doha — 15p per litre
Prior to the discovery of oil in Qatar, the small Arab emirates' economy was mainly built on fishing and pearl hunting. Now the country's
national petroleum supplier accounts for 70% of the government's revenue. Recent high oil prices have made per capita income in Qatar amongst the
highest across the globe while petrol prices are the seventh lowest at just 15p per litre.
6. Kuwait: Kuwait City — 14p per litre
Kuwait is tenth largest oil producer in the world and its supply is thought to account for 10% of global reserves. But nevertheless, the government
subsidises both public transport and petrol bringing prices down to just 14p per litre.
5. Bahrain: Manama — 13p per litre
Compared with its Middle-Eastern neighbours, Bahrain has fairly limited oil supplies. However 60% of the country's economy is still rooted in
petroleum refining, which has grown strongly over the last ten years. The country is at fifth in the rankings with an average petrol price of just 13p
per litre.
4. Turkmenistan: Ashgabat — 12p per litre
The UK government taxes petrol to the high-heaven, while in Turkmenistan they give it away — literally. Every driver in the Turkic state is entitled
to 120 litres of petrol for free every month. If they exceed this, the pump price is only 12p per litre.
3. Libya: Tripoli — 9p per litre
As I mentioned earlier, petrol supplies in Libya have dried up recently owing to the closure of several oil plants in the midst of unrest in the
country. But when pumping at its prime level, the country is the ninth largest oil producer with an average petrol price of just 9p per litre.
2. Saudi Arabia: Riyadh — 8p per litre
Saudi Arabia is the largest exporter of petroleum in the world. Domestically fuel prices sit at around 8p per litre. Yet only half of the population
can take advantage of these low rates; as women in Saudi Arabia are banned from driving due to a religious fatwa (Islamic law) imposed by conservative
Muslim clerics.
1. Venezuela: Caracas — 2/3p per litre
Yes, to get hold of the cheapest petrol in the world, you'll have to travel all the way to the South American country of Venezuela. Petrol is
just 2-3p per litre in the socialist republic — that's around 54 times cheaper than prices here in the UK. So if you have a 70 litre fuel tank in
your car, you could fill it up in Venezuela for around £1.50. While In Britain it would cost you a whopping £95.
Prices are kept low thanks to subsidies from the country's left-wing government.
[See also: How to save on petrol in the UK]
A matter of context
Now, before you all start weeping at the prospect of 2p per litre petrol, it's worth remembering that these insanely low rates almost always come
at some cost.
Take Venezuela. Yes, the country may have outrageously low petrol prices. But vast numbers of its residents live in poverty - the UN calculates 30% of
the population live on less than $2 a day. As The Guardian's South America correspondent Rory Carroll points out, some analysts place the overall
cost to economy of maintaining such low petrol prices (through subsidies and loss of taxation) at around £13bn. That's more than double the
education and health budgets.
But this doesn't mean that the cost of petrol isn't unfairly high in this country, especially when you consider that the UK is actually
amongst the top 20 oil producing countries in the world.
http://www.fairfueluk.com/ backed by all motoring organisations and motoring press. they need your help, Log on and vote because it matters.
I am just thankful I run on LPG
One significant factor in the cost of oil is the value of the UK Pound - the less the Pound is worth, the more we have to pay for a barrel of oil. If
you match the cost of gold against that of oil, you will find that oil hasn't really changed its price much for a very long time. However, the
value of the Pound has dropped steadily for decades.
Of course, this doesn't include the greed of governments in setting taxes...
quote:
Originally posted by britishtrident
I am just thankful I run on LPG
They dont care about us, the conservatives dont even know there are people with less than £2m in this country.
Time to go down there and set fire to the palace...
Anyway, its too late, we had our chance and blew it....
Just wish I could do a Richard...
It's easy. Don't pay for the poor, the sick, or the old and there would be little need for tax. Petrol is a perfect way for the government
to hide their "share" because the price without the tax is never mentioned.
In Canada, the highest oil company profits are generated where (reputedly)? Yes, that would be Alberta. Where is most of Canadian produced oil coming
from? Yes, that's right. So it is one giant conspiracy.
That said, I would never drive if I didn't have to. We have such poor bus and train service here, we are forced into our cars. Driving is not a
sport for most people, but a necessity, due to our distances. They get into their behemoth SUV's, crank up the phone, put the coffee on, and
barge around to their cherubs' violin lessons. Do they care about fuel consumption? No.
"Why am I paying a 100 quid to fill my tank" 'cos we're all in love with the motor car and the freedom it represents! The
existance of this forum proves that.
If you wanna drive your car you have to pay - simples. If you don't wanna pay then your only option is to return to the life of a pre WW2 urban
peasent.
'tis why we all pay up!
Government share of the tax has actually gone down in recent years (though the total ammount has increased) but the oil companies have more than
doubled the pre tax price in that same time.
Oil companies wouldn't pass on the price drop in crude last year but have been quick to put more when the price went back up.
The arabs have most of the worlds remaining oil reserves and while the UK and US governments keep 'annoying' them they'll keep
squeezing our balls!
[Edited on 24/3/12 by chillis]
quote:
Originally posted by mangogrooveworkshop
According to Whatprice.co.uk, the forecourt price makes up just 5% of the total cost of petrol,
the recent rise is due to the iran thing, theres no oil coming out of there at the moment so thats pushed prices up.
that and the government trying to make money out of us to pay back the defecit while still paying out aid to every country in the world and dole
money, trams we dont want etc etc etc
i always say id happily pay Mr shell 1.45 for a litre of his lovely petrol, im just pissed cause he gets sod all of it. as said we need to arrange big
protests all over britain.
i was speaking to a guy working in saudi, has a big dodge thingymajig and cost him 6 quid to fill up including a tip.
My idea has always been that instead of arranging protests, which not enough people will support.
We should actually do what the government alledgedly want us to ,i.e. leave the car at home, because as we know these huge taxes are to encourage us
to save the environment (not to fund the country)!!!!
We all go about our usual business but use public transport, the services wouldn't be able to cope , people would not be able to get to work etc.
many large businesses would lose money and working hours and they would lobby the government for us.
Also it would cause a massive overstocking of fuel at garages and depots, the tanker ships would be queing at Milford Haven etc, the price would have
to come down in response to market forces.
All perfectly legal , no one would get arrested for going to work on a day on public transport.
National Public Transport Weeks
[Edited on 24/3/12 by Surrey Dave]
in Greece they have raised the prices to 1.75 to 2.00 euros per litre.
that is about 1.55 to 1.70 pounds per litre all ready.
Surrey Dave does have a point But not sure enough people would go for it.
You think you got it bad? try being 19 and having to fork out atleast a grand for insurance, plus all this petrol cost! I'm starting to think I
will never have a car....
[Edited on 24/3/12 by vanepico]
Another reason is for increasing prices is that oil is priced in US$ and the American Federal Reserve keeps printing dollars like it's going out
of fashion. The bank of England has done the same for the pound with "Quantitative Easing".
A number of oil producers are starting to accept other currencies and commodities in exchange for oil as confidence in the dollar and other western
currencies diminishes.
Blame the government for the taxes and for printing money like no tomorrow to pay for their debts. Every time the government prints, your earnings are
diminshed. Bastards...
Language there are also youngsters on this site
quote:
Originally posted by austin man
Language there are also youngsters on this site
Caught out by a 30 month memory 
Zing!
Renault Z.E. series of vehicles... Nissan Leaf... Honda FCX... all good reasons to not pay £100 to fill up.
Oh wait they're not actually making any of them... I mean why should they?
Oh yeah they'll make a freaking killing advertising the relative fuel costs!
For what it's worth, I bet the majority of younger people know more swearwords than their elder counterparts anyway 
Apologies.
Obviously currency debasement is a lesser threat to the future of our children than language found in "The Machinegunners" which was a book
on the syllabus in my English literature class as a thirteen year old. I will be more careful in future
[Edited on 24/3/12 by RichieW]
quote:
Originally posted by vanepico
For what it's worth, I bet the majority of younger people know more swearwords than their elder counterparts anyway
Hmm now that you've pointed that out it does seem a bit weird haha I've never used the word tbh. You can tell by the way I use punctuation
quote:
Originally posted by JoelP
quote:
Originally posted by vanepico
For what it's worth, I bet the majority of younger people know more swearwords than their elder counterparts anyway
Only because kids make up words as they go along.
Lad i worked with used the word 'bare' to mean lots. I should have bought him a dictonary as a leaving present!
I think it needs to be said, that instead of blaming the government, think about your own choice come next election. There is a choice, believe it or not. The oil companies are gouging too, to a much greater extent than a few years ago.
a grand for insurance at 19!! im 22 and paying more than that!
anyway, back to the topic... theres so many aspects that are changing the prices we cant really single out one too easily.
but lets face it the government do take the pee quite a lot
Tanked up Friday 5 minutes after BP had put the price up (doh), if the Government dont get you the oil Co's will, obviously they think that
putting the price up just after the budget will make the average Joe think the government is the culprit. Do these greedy b@stards not realise theres
a recession on and thier avarice is killing everyone and forcing all prices up.
Cheers
Bob
This report may be of interest;
http://www.bbc.co.uk/news/uk-17502973
So....we, as in the western world, are addicted to the cheap goods come out of China and other emerging economies to the point we are not prepared to
pay home grown prices. The knock on effect is the emerging economies get larger and the workers start wanting to have what their western equivalents
have....cars and other personal transport. Therefore we see an explosion of power usage in China to make the cheap goods we love so much and the
dramatic increase in the motor car and hence fuel consumption off the wealth that is created.
In short, if you want to reduce the unemployment in this country and get all the engineers back to work and to reduce your fuel costs stop being
locost and support local industry. Now debate that !
People working in Nottingham ( myself included) will from next month have to pay £280 plus vat just for the pleasure of parking at your own place of
work, this fee could increase considerably in the coming years, other councils will be watching with interest.
Add that to the cost of fuel and some people are feeling the pain.
quote:
Originally posted by eddbaz
People working in Nottingham ( myself included) will from next month have to pay £280 plus vat just for the pleasure of parking at your own place of work, this fee could increase considerably in the coming years, other councils will be watching with interest.
Add that to the cost of fuel and some people are feeling the pain.
Per year, and that,s any company in the cities boundary that employs more than 10 people.