For those of us who commute, the remote working trend enforced during the pandemic may now be preferable over working in an office, due to the astronomical fuel prices we are now seeing. With the government unlikely to be of much help, many are now considering a job closer to home, or getting rid of their car altogether to save on costs. Why are these prices rising so high, and so fast?
In part, we can blame COVID. During the worst of the pandemic, the demand for fuel was significantly less. This resulted in job losses and the closure of some operations. Now that the demand is increasing quickly, the price rises to match the demand. Those supplying the crude oil that produce petrol and diesel fuel have not been able to maintain supply at the pre-covid rate, and as a result, raised their prices.
In addition to this, the US dollar has been stronger than the pound, and with oil being paid for in dollars, this further adds to the cost.
This greatly depends on which car you own, as well as the type of fuel needed. In the space of a year, many have seen the cost of filling a car suitable for a family rise by as much as £40. This represents a staggering 29% increase. Add in the current energy bill increases that show no sign of slowing, and it is indicated that the costs we previously thought high, are now found to be excessive. Data from Experian shows that the following increases have taken place since June last year on both unleaded and diesel:
We certainly hope so! However, the chances of it happening could be slim unless some sort of intervention takes place. At present, two main factors are contributing to these prices. In the world of retail, profit is king and whilst these prices are driving such record profits for the companies, they would not see a reason to deliver shareholders less of a return.
Occasionally, however, they do, and a reduction is fed through to the consumer. Since the record high a few months back, prices have slid back a little, but are still exceptionally high. If we add in the Russia-Ukraine conflict and many countries stepping away from importing Russian goods, the options for supply become more limited. When supply from other nations can increase to match the Russian shortfall, we then may see a further reduction in fuel costs.
You may remember when the cost of filling your car rose exponentially, protests and complaints to MPs did see a 5p reduction per litre in fuel duty. However, this has since been swallowed up by the further increases. Interestingly, this 5p cut wasn’t experienced by all, and an investigation is now taking place into whether retailers put profit before customer.
There are a few things you can do if driving is your only option. Last month, we created a handy guide with a few tips on what you can do whilst getting from A to B and use less fuel as a result. Hopefully, whilst costs are still high, these tips may help you get a few extra miles from your tank.
If you are looking for a more economical car and want some fast car finance speak to us. At Euphoria Finance, we have access to over 50,000 vehicles. Whether used car finance deals are what you need, or you are a driver concerned about poor credit car finance, we can help. Additionally, our team act as direct lenders, ensuring that new drivers get the best in first car finance, and a cheaper way to obtain their new vehicle.