Petrol retailers warn of record prices at the pumps within days
Petrol retailers have been accused of “taking a bigger cut” by a motoring group after warning that record pump prices are expected within days.
The Petrol Retailers Association (PRA) – which shot to public prominence last month as the industry grappled delivery problems that sparked weeks of panic-buying in areas of England – blamed rising wholesale costs for the situation.
The body, which represents about two-thirds of forecourts across the UK, said pump prices of 142 pence per litre (ppl) for petrol and 148p for diesel set in April 2012 were “almost certain to be eclipsed before the end of October”.
Its outgoing chairman, Brian Madderson, said: “The primary reason is the rise and rise of crude oil costs which recently hit $85/barrel for Brent crude.
“This involves more than a 50% increase since January 2021 and has been caused by a cutback in production from OPEC countries and Russia at the same time as the global economies are staging a rapid economic turnaround from the global pandemic.”
He pointed to the latest Experian Catalist data which showed average petrol costs of 141.35ppl and 144.84ppl on Tuesday and warned there was no end in sight to the pressure on pump costs amid market talk that Brent could hit $100/barrel by Christmas.
Mr Madderson, whose organisation represents independent fuel operators, added: “Current average pump prices across the UK are being softened by some of the largest retailers who typically benefit from a 3 or even 4-week lag to their delivered fuel prices.
“Only last week, two major grocery retailers in Belfast were vying for business by offering fuel at below standard wholesale cost with pump prices as low as 125.9ppl for petrol and 130.9ppl for diesel.”
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HGV delivering fuel is driven by military
Motoring groups had, in recent weeks, suggested that rising prices were not only down to market forces but profiteering among retailers.
RAC fuel spokesman Simon Williams said of the PRA’s warning: “The bioethanol component of unleaded has increased from 5% to 10% with the introduction of E10 in September and unfortunately that costs even more than petrol on the wholesale market.
“Retailers are also taking a bigger cut on petrol than they normally do at around 8p a litre which is a further blow to drivers, particularly as VAT is charged at 20% on top of this and the other increases.”
He added: “We strongly urge retailers not to contribute further to the pump price rise”.
The price prediction adds to an already gloomy picture for household bills over the winter months – a consequence of global supply disruption as economies get back in gear including a shortage of workers as supply fails to meet demand.
The Office for National Statistics reported earlier in the day that fuel prices had provided the largest upwards pressure on inflation during September without the impact of the delivery problems even being included.
Economists say wider energy costs – particularly for home gas and electricity – will provide the largest squeeze on family finances in the months ahead.
Business
Donald Trump tells UK to ‘get rid of windmills’ and says raising windfall tax on North Sea oil is ‘big mistake’
Donald Trump has said the UK is making “a very big mistake” in its fossil fuel policy – and should “get rid of windmills”.
In a post on Friday on his social media platform, Truth Social, Mr Trump shared news from November of a US oil producer pulling out of the North Sea, a major oil-producing region off the Scottish coast.
“The UK is making a very big mistake. Open up the North Sea. Get rid of windmills!”, the US president-elect wrote.
The Texan oil producer Apache said at the time it was withdrawing from the North Sea by 2029 in part due to the increase in windfall tax on fossil fuel producers.
North Sea oil rig. Pic: Reuters
The head of Apache’s parent company APA Corporation said in early November it had concluded the investment required to comply with UK regulations, “coupled with the onerous financial impact of the energy profits levy [windfall tax] makes production of hydrocarbons beyond the year 2029 uneconomic”.
Chief executive John Christmann added that “substantial investment” will be necessary to comply with regulatory requirements.
Mr Trump used a three-word campaign pledge “drill, baby, drill” during his successful election campaign, claiming he will increase oil and gas production during his second administration.
In the October budget announcement, UK Chancellor Rachel Reeves raised the windfall tax levied on profits of energy producers to 38%.
Called the energy price levy, it is a rise from the 25% introduced by Rishi Sunak in 2022 as energy prices soared following Russia’s invasion of Ukraine.
Many oil and gas businesses reported record profits in the wake of the price hike.
The tax was intended to support households struggling with high gas and electricity bills amid a broader cost of living crisis.
Apache is just one of a glut of firms that made decisions to alter their North Sea extraction due to the Labour policy.
Read more
Business, the economy and the pound in your pocket – what to expect from 2025
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Even before the new government was elected, three companies, Jersey Oil and Gas, Serica Energy and Neo Energy – announced they were delaying, by a year, the planned start of production at the Buchan oilfield 120 miles to the north-east of Aberdeen.
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