‘Truly dark day for drivers’ as petrol prices hit record high in UK

Published

4 years ago

October 25, 2021

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Petrol prices have hit a record high across the UK in what the RAC has described as a “truly dark day for drivers”.

The average daily price per litre hit 142.94p on Sunday in data reported on Monday morning by RAC/Experian Catalist, which is separate from the weekly average record price reported by government.

The previous record was 142.48p in April 2012.

Diesel reached 146.50p a litre on Sunday – still 1.43p short of its April 2012 all-time high of 147.93p.

The price of unleaded has rocketed by 28p a litre from 114.5p in October 2020, adding £15 to the cost of filling up a 55-litre family car, according to RAC Fuel Watch.

It comes as oil prices worldwide continue to climb, with the benchmark Brent crude increasing 56 cents, or 0.7%, to $86.09 a barrel, following on from last Friday’s 1.1% gain.

RAC fuel spokesman Simon Williams said: “This is truly a dark day for drivers, and one which we hoped we wouldn’t see again after the high prices of April 2012. This will hurt many household budgets and no doubt have knock-on implications for the wider economy.

“The big question now is: where will it stop and what price will petrol hit? If oil gets to $100 a barrel, we could very easily see the average price climb to 150p a litre.

“Even though many people aren’t driving quite as much as they have in the past due to the pandemic, drivers tell us they are more reliant on their cars now than they have been in years, and many simply don’t have a choice but to drive.

Why are petrol prices so high in the UK?

The main reason is the jump in crude prices worldwide (in January the price was just over $50 a barrel and by October it pushed over $86), but this is not the only factor affecting petrol prices in the UK.

In September the UK switched to E10 petrol in an effort to be greener.
This meant the bio content of unleaded increased from 5% ethanol to 10%.

Ethanol is more expensive than petrol and the change added around a penny a litre to the cost, according to RAC figures.

This could rise even further as the price of ethanol has gone up by 52% since E10 was introduced.
The bio and petrol components of each litre add up to around 50p.

Then you have the various taxes that are added to that cost:
Duty sits at 57.95p a litre and VAT currently equates to nearly 24p.
The VAT, of course, is applied on top of all other elements of the petrol price including duty and retailer margin.

Since April 2020 retailers have also increased their average margin on a litre by 2p from around 5.5p to 7.5p a litre.

The amount of petrol sold at the pumps plummeted when most of us stayed home during the first UK lockdown last year.
Retailers, particularly the smaller independent ones, are now trying to balance the books.

“There’s a risk those on lower incomes who have to drive to work will seriously struggle to find the extra money for the petrol they so badly need.

“We urge the government to help ease the burden at the pumps by temporarily reducing VAT, and for the biggest retailers to bring the amount they make on every litre of petrol back down to the level it was prior to the pandemic.”

The situation for petrol is unlikely to improve soon, with analysts forecasting Brent crude prices to remain high for the rest of the year.

US investment bank Goldman Sachs is among those to predict that Brent crude could reach $90 a barrel by the end of 2021, blaming a rebound in demand from Asia following pandemic re-openings.

Elsewhere, India and France are also among the countries to have seen record highs in recent days, although – like in the UK – their petrol prices are inflated by massive fuel taxes.

In the UK, tax accounts for 57% of the average retail price for a litre of petrol, according to the RAC.

The AA said the high petrol prices could lead more drivers to consider switching to electric vehicles, with electricity prices as low as 4.5p per kWh off peak at home.

The organisation’s fuel spokesman Luke Bosdet said: “Whether it’s down to oil producers, market speculators, Treasury taxes or struggling retailers trying to balance their margins, record pump prices must be saying to drivers with the means that it is time to make the switch to electric.

“As for poorer motorists, many of them now facing daily charges to drive in cities, there is no escape. It’s a return to cutting back on other consumer spending, perhaps even heating or food, to keep the car that gets them to work on the road.”

The record-high prices come just weeks after much of the UK saw fuel shortages due to a lack of tanker drivers.

Ron Smith, senior oil and gas analyst at BCS Global Markets, said this shortage would also continue to affect motorists, adding: “The problem for motorists is only partly one of higher prices.

“As or more important for many will be the ability to get petrol at any price, given the lack of fuel at forecourts across the country.

“Of course, even if the trucking situation is solved, petrol prices seem likely to remain elevated for the coming months due to the simple reason that crude prices have risen substantially.”

Business

UK economy grows more than expected, according to official figures

Published

7 hours ago

May 15, 2025

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UK economy grows more than expected, according to official figures

The UK economy showed strong growth in the first three months of the year, according to official figures.

Gross domestic product (GDP) – the standard measure of an economy’s value – grew 0.7% in the first quarter of 2025, the Office for National Statistics said.

The rise is better than expected. An increase of just 0.6% was anticipated by economists polled by the Reuters news agency.

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It’s significantly better than the three months previous, in which a slight economic expansion of just 0.1% was reported for the final quarter of 2024.

The ONS also said there was a small amount of growth last month, as GDP expanded 0.2% in March, which similarly beat expectations.

No growth at all had been forecast for the month.

How did the economy grow?

A large contribution to high GDP growth was an increase in output in the production sector, which rose 1.1%, driven by manufacturing and a 4% increase in water supply, the ONS said.

Also working to push up the GDP figure was 0.7% growth in the biggest part of the UK economy – the services industry.

Wholesale, retail and computer programming services all performed well in the quarter, as did car leasing and advertising, the ONS said.

It shows the economy was resilient, as the country headed into the global trade war sparked by President Trump’s so-called ‘liberation day’ tariff announcement on 2 April.

Welcome political news, for now

The data is welcome news for a government who have identified growing the economy as its number one priority.

Chancellor Rachel Reeves is taking the figures as a political win, saying the UK economy has grown faster than the US, Canada, France, Italy and Germany.

“Today’s growth figures show the strength and potential of the UK economy, ” she said.

“Up against a backdrop of global uncertainty, we are making the right choices now in the national interest.”

Such GDP numbers may not continue into April as businesses and consumers were hit with a raft of bill rises, and Mr Trump’s tariffs fired the starting gun on a global trade war.

Last month, water, energy and council tax bills rose across the country while employers faced higher wage costs from the rise in their national insurance contributions and the minimum wage.

But above-inflation wage growth and fading consumer caution could continue to boost the economy.

Business

Foreign states face 15% newspaper ownership limit amid Telegraph row

Published

1 day ago

May 14, 2025

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Foreign states face 15% newspaper ownership limit amid Telegraph row

Foreign state investors would be allowed to hold stakes of up to 15% in British national newspapers, ministers are set to announce amid a two-year battle to resolve an impasse over The Daily Telegraph’s ownership.

Sky News has learnt that the Department for Culture, Media and Sport could announce as soon as Thursday that the new limit is to be imposed following a consultation lasting several months.

The decision to set the ownership threshold at 15% follows an intensive lobbying campaign by newspaper industry executives concerned that a permanent outright ban could cut off a vital source of funding to an already-embattled industry.

It would mean that RedBird IMI, the Abu Dhabi state-backed fund which owns an option to take full ownership of the Telegraph titles, would be able to play a role in the newspapers’ future.

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RedBird Capital, the US-based fund, has already said it is exploring the possibility of taking full control of the Telegraph, while IMI would have – if the status quo had been maintained – forced to relinquish any involvement in the right-leaning broadsheets.

One industry source said they had been told to expect a statement from Lisa Nandy, the culture secretary, or another DCMS minister, this week, with the amendment potentially being made in the form of a statutory instrument.

Other than RedBird, a number of suitors for the Telegraph have expressed interest but struggled to raise the funding for a deal.

The most notable of these has been Dovid Efune, owner of The New York Sun, who has been trying for months to raise the £550m sought by RedBird IMI to recoup its outlay.

Another potential offer from Todd Boehly, the Chelsea Football Club co-owner, and media tycoon David Montgomery, has yet to materialise.

RedBird IMI paid £600m in 2023 to acquire a call option that was intended to convert into ownership of the Telegraph newspapers and The Spectator magazine.

That objective was thwarted by a change in media ownership laws – which banned any form of foreign state ownership – amid an outcry from parliamentarians.

The Spectator was then sold last year for £100m to Sir Paul Marshall, the hedge fund billionaire, who has installed Lord Gove, the former cabinet minister, as its editor.

The UAE-based IMI, which is controlled by the UAE’s deputy prime minister and ultimate owner of Manchester City Football Club, Sheikh Mansour bin Zayed Al Nahyan, extended a further £600m to the Barclays to pay off a loan owed to Lloyds Banking Group, with the balance secured against other family-controlled assets.

Other bidders for the Telegraph had included Lord Saatchi, the former advertising mogul, who offered £350m, while Lord Rothermere, the Daily Mail proprietor, pulled out of the bidding last summer amid concerns that he would be blocked on competition grounds.

The Telegraph’s ownership had been left in limbo by a decision taken by Lloyds Banking Group, the principal lender to the Barclay family, to force some of the newspapers’ related corporate entities into a form of insolvency proceedings.

The newspaper auction is being run by Raine Group and Robey Warshaw.

The DCMS declined to comment.

Business

Burberry to cut 1,700 jobs after multi-million pound loss

Published

1 day ago

May 14, 2025

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Burberry to cut 1,700 jobs after multi-million pound loss

Burberry, the UK’s only global luxury brand, is to cut around 1,700 jobs worldwide over the next two years after reporting a steep financial loss.

The company lost £66m in pre-tax profit in the year ended in March as luxury goods sales fell across the world and the company weathered an “uncertain” environment and a “difficult macroeconomic backdrop”.

A year earlier, it recorded £383m in profit.

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It’s suffered in recent years with the share price falling to such an extent the business was removed from the FTSE 100, the index of most valuable companies listed on the London Stock Exchange.

Despite the financial performance, the company was upbeat, with chief executive Joshua Schulman saying “I am more optimistic than ever that Burberry’s best days are ahead and that we will deliver sustainable profitable growth over time”.

What cuts are being made?

The retailer did not specify any shop closures – in the past year, it closed 26 and also opened 26 stores – but did highlight shift cuts and consolidations.

“We don’t have a store closing programme, per see,” Mr Schulman told investors

The night shift at Burberry’s Castleford factory will be cut, it proposed, saying the shift has resulted in overproduction.

“Significant” investment in the facility will be made, however, as the ambition is to scale up British production “over time”, Mr Schulman said.

Changes to the retail network across the world will be made with shop staff being scheduled around “peak traffic”.

Burberry will be “realigning” shop staff, he said, “so that we can offer the best service” at the busiest times.

There will also be a “simplification” of Burberry’s regional structure and a “rebalancing” of central and regional responsibilities to reduce duplication and “accelerate decision making” through the retail network.

But the majority of changes will be made to “office space teams” around the world, the CEO said.

Commercial and creative teams have already been consolidated, Burberry’s annual results said.

What’s gone wrong?

Aside from the global slowdown in luxury goods sales over recession fears, additional headwinds have come in the form of President Trump’s tariffs.

“Clearly, the external environment has become more challenging since mid-February”, Mr Schulman told investors.

Tariff risks were higher than first planned, the annual results said.

It led the US market to be described by Mr Schulman as “choppy” since February when Mr Trump began announcing tariffs on Mexico, Canada and China, as well as on goods such as steel and cars.

Sales also fell in the Asia Pacific region by 16%, the results showed.

Criticism was levelled at the 2021 British government decision to withdraw VAT refunds for overseas visitors, “which has made the UK the least competitive destination in Europe for tourist shopping”, the results read.

“Business in our UK home market continues to be seriously impacted” by the move.