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

Published

3 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

Marks & Spencer’s website and app go down

Published

10 hours ago

May 18, 2024

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Marks & Spencer's website and app go down

Marks & Spencer’s website and app has not been working for several hours, with a message telling shoppers “you can’t shop with us right now”.

“We’re working hard to be back online as soon as possible,” it adds.

All the menus and images have disappeared apart from one showing a model in a green jacket.

Customers trying to use the app got the message: “Sorry you can’t shop through the app right now. We’re busy making some planned changes, but will be back soon.”

The site is understood to have been down for several hours.

Replying to one customer on X, the retailer said: “We’re experiencing some technical issues but we are working on it.”

M&S is the latest high street name to have technical issues – last month some Sainsbury’s shoppers had problems with their online orders.

The outage comes a few days before M&S is expected to reveal a big jump in annual profits.

It’s been a successful year for the brand, with strong sales across the business following a turnaround plan that has included store closures and cost cutting.

Business

Employees at fintech giant Revolut to cash in with $500m share sale

Published

13 hours ago

May 18, 2024

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Employees at fintech giant Revolut to cash in with 0m share sale

Bosses at Revolut, Britain’s biggest fintech, are drawing up plans to allow employees to cash in with a sale of stock valued at hundreds of millions of pounds.

Sky News has learnt that the banking and payments services provider is lining up investment bankers to coordinate a secondary share sale worth in the region of $500m (£394m).

Morgan Stanley, the Wall Street bank, is expected to be engaged to work on the proposed stock offering, which will take place later this year.

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City sources said this weekend that Nik Storonsky, Revolut’s co-founder and chief executive, was determined to seek a valuation of at least the $33bn (£26bn) it secured in a primary funding round in 2021.

“This will not be a down-round,” said one person familiar with Revolut’s thinking.

Although the fintech, which has more than 40 million customers, is not planning to raise new capital as part of the transaction, any sizeable share sale will still be closely watched across the global fintech sector.

It is expected to be restricted to company employees.

Revolut ranks among the world’s largest financial technology businesses, with revenue virtually doubling last year to around £1.7bn, according to figures expected to be published in the coming months.

Founded in 2015, it has experienced a string of regulatory and compliance challenges, with reports last year highlighting its release of funds from accounts flagged by the National Crime Agency as suspicious.

The company’s growth has taken place at breakneck speed, with customer numbers soaring from 16.4m at the point of the Series E fundraising nearly three years ago.

Insiders argued that despite the protracted downturn in tech valuations over the last two years, Revolut’s relentless expansion would easily justify it maintaining its status as Britain’s most valuable fintech.

Monzo, the UK-based digital bank, recently confirmed a Sky News story that it had closed a funding round worth nearly £500m, including backing from an arm of Google’s owner, Alphabet, and a Singaporean sovereign wealth fund.

Elsewhere, however, the funding landscape has been bleaker, with a growing number of tech companies which had attracted unicorn valuations of more than $1bn now struggling to stay afloat.

Revolut has allotted stock options to many of its 10,000 employees as part of their compensation packages, although it was unclear how many would be eligible to dispose of equity in the transaction later this year.

A source close to the company said it had had numerous expressions of interest from prospective investors.

Revolut’s current shareholders include SoftBank’s Vision Fund and Tiger Global.

News of the proposed share sale comes as Revolut’s investors continue to await positive news about its application for a UK banking licence.

The company applied to regulators to become a bank in Britain more than three years ago, but has so far failed to secure approval.

Mr Storonsky has been publicly critical of the delay, and last year questioned the approach of British regulators and politicians, as he suggested that he would not contemplate a listing on the London Stock Exchange.

An initial public offering of Revolut appears to still be some way off, although it would not surprise investors or industry peers if it initiated a listing process in the next couple of years.

One person close to Revolut said board members were among those expected to participate in the secondary share sale, although further details were unclear this weekend.

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The company is chaired by Martin Gilbert, the City veteran who has faced governance and performance challenges at Assetco, the London-listed asset manager he runs.

Its other directors include Michael Sherwood, the former Goldman Sachs executive who was jointly responsible for its operations outside the US and who was regarded as one of the most skilled traders of his generation.

An external shareholder in the company said the exclusion of non-employees from the deal could draw criticism from some investors.

Revolut has conducted secondary share sales of this kind in the past, including after its 2021 Series E round.

This weekend, Revolut declined to comment.

Business

Ex-Post Office head of IT says Paula Vennells ‘hoped to avoid’ inquiry – and reveals she blocked her number

Published

2 days ago

May 16, 2024

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Ex-Post Office head of IT says Paula Vennells 'hoped to avoid' inquiry - and reveals she blocked her number

A former Post Office executive has said she was forced to block ex-boss Paula Vennells’ phone number after the ex-CEO called multiple times asking for help to avoid an independent inquiry into the Horizon IT scandal.

Lesley Sewell, previously the company’s head of IT, told the Post Office inquiry on Thursday that former CEO Ms Vennells had reached out to her four times between 2020 and 2021.

Ms Sewell said that she blocked Ms Vennells’ number due to discomfort with the contact.

In her witness statement to the probe, Ms Sewell said that one of Ms Vennells’ emails referenced the need to fill in memory gaps regarding Horizon and “Project Sparrow”, a committee addressing issues with forensic accountants who identified flaws in the accounting system.

“Paula contacted me on four occasions in total. I recall blocking her number after the last call as I did not feel comfortable with her contacting me,” Ms Sewell said.

“I had not spoken to Paula since I had left POL [Post Office Limited] in 2015.”

According to Ms Sewell’s testimony, former chief executive Ms Vennells said that she had “been asked at short notice” to appear before a parliamentary select committee on “all things Horizon/Sparrow and need to plug some memory gaps”.

Ms Sewell says Ms Vennells added: “My hope is this might help avoid an independent inquiry but to do so, I need to be well prepared.”

Ms Sewell, who struggled to contain her emotions and broke down in tears while giving her oath at the start of her inquiry evidence, was offered support and breaks as needed by chairman Sir Wyn Williams.

Sir Wyn told the former executive: “Ms Sewell, I appreciate this may be upsetting for you, Ms Price will ask you a number of questions in a proper and sensible manner, but if at any time you feel you need a break, just let me know, all right?”

The Post Office has faced significant scrutiny following the ITV drama Mr Bates Vs The Post Office which highlighted the Horizon IT scandal.

The faulty system led to the prosecution of more than 700 sub-postmasters between 1999 and 2015, with many still awaiting full compensation despite government announcements regarding payouts for those with quashed convictions.