Filling up our vehicles continues to dominate a large chunk of our household budgets so UK DPF have looked into why prices are still high and whether we’ll see any notable changes any time soon.

In 2022 UK fuel prices hit record highs, the amount we were all paying to fill our vehicles was eyewatering to say the least. The average price of petrol reached 191.50p per litre and diesel hit 199.00p. If you were unlucky enough to refuel from an out-of-town fuel station or worse, a major motorway service station, you’ll have easily paid over £2 a litre!

Thankfully the cost has dropped somewhat since the turn of the year but filling up is still expensive. Along with the wider cost of living crisis, the consumer is hurting. The prices on average right now (June 2023) are 143.3p for Petrol and 145.4p for diesel.

The price we pay at the pump is affected by many different factors. The wholesale price of fuel is likely to remain uncertain for some time and everything depends on the following:

  • The global price of oil
  • The demand and supply for crude oil
  • Production and refinery capacity
  • Distribution costs
  • The current pound to dollar exchange rate, as all refined oil is sold in US Dollars per barrel
  • Fuel Duty by the UK government which amounts to 52.95p per litre
  • VAT at 20%
  • The mark up the garages decides upon

The issue at present is that the war in Ukraine has had a huge impact on fuel costs. Russia is the third largest global supplier. They supplied 14% of the worlds refined oil which amounted to approximately 7-8 million barrels a day. When Russia invaded Ukraine their oil supply came to a grinding halt and there was a need to find alternatives for many countries. This of course led to shortages and the costs skyrocketing, we all of course remember the dark days of forecourts running dry and lengthy queues to fill up. Since then supply has improved and demand has lessened so we are currently in a better place than in 2022. Hopefully this will continue to be reflected in the price we pay at the pump.

Predictions are that fuel prices will continue to fall throughout the rest of the year. Fuel is purchased in advance so the trend for lower prices can take a while to kick in – generally speaking it can take 4 weeks to reach the pumps from the point of purchasing but depending on reserve levels and demand this can vary greatly too.

There is also an added problem in that the retailer is quick to put the price of fuel up to maximise profits and cover increasing operating costs. As we know through reports in the press, retailers are then reluctant to lower the price when the wholesale cost of oil drops. Some retailers are now making up to 22p on each litre of diesel they sell compared to an average of 9p per litre in 2021/22. News of the profits of the big suppliers over the last couple of years have been hard to swollen for consumers.

The cost of running our vehicles will unfortunately remain on the high side and the only thing we can do to help keep costs down is to try to maintain our cars and vans as best we can. Regular servicing of filters, including your oil filter and DPF, will help to save fuel. Keep an eye on your tyres for wear and tear, air pressure and correct tracking, all of which have a great impact on fuel consumption. Where possible, remove excess weight from your vehicle – a car boot can provide useful storage space but it can prove costly if heavy items begin to live there.

For more tips on saving money on fuel, check out our article featuring Top 10 Tips for Saving Money on Fuel!