Fuel prices set to rise again

Sarah Tooze, Consumer Editor
Thu, 05 May 2022

• Dip in the sterling-to-dollar exchange rate starts to make wholesale fuel more expensive.
• EU’s plan to phase out Russian oil is also likely to cause the price of a barrel of oil to rise.
• Fuel retailers protecting themselves from rises with their margins estimated to be up 4p in April.

Motorists must brace themselves for further fuel price rises, following a slight dip in April. 

The average price of petrol fell 0.5p in April to 162.75p-per-litre, with diesel remaining at 177p, according to the RAC.

Petrol is now 4.5p a litre lower than the record high of 167.3p set on 22 March while diesel is 2.5p below 179.9p recorded on 23 March.

However, wholesales costs have started to increase again due to a reduction in the sterling-to-dollar exchange rate over April, with a fall from $1.3 to $1.25. This makes wholesale fuel more expensive for retailers to buy as fuel is traded in dollars, and is likely to lead to an increase for motorists at the pumps. 

RAC fuel spokesman Simon Williams said: “Although the price of oil has cooled considerably, there’s still plenty of uncertainty in the market which is leading to prices jumping around a lot. This, coupled with the exchange rate worsening, isn’t good for drivers and news that the EU is planning to phase out Russian oil is likely to cause the barrel price to rise.”

He suggested that the biggest fuel retailers have been protecting themselves against future rises by failing to pass on the savings they were benefiting from when wholesale prices were lower earlier in April.

"Retailers’ margins were far higher in April than they were in March," Williams said. "RAC Fuel Watch data estimates they took around 4p more a litre than they did over the course of the previous month.

"This will surely be a disappointment to the Chancellor who cut fuel duty by 5p a litre in the Spring Statement.”

Every mile is now costing petrol car drivers 18.5p and diesel drivers nearly 20p, based on a notional figure of 40mpg, the RAC says.

The cost of filling a 55-litre family car from empty is 50p less than it was at the start of April at £89.51 while diesel still costs £97 for a full tank.

Asda was the cheapest of the big four supermarkets for petrol in April at 159.38p, closely followed by Morrisons and Sainsbury's, which were both under 160p. 

Asda also had the cheapest diesel at an average of 173.12p across its sites – half a penny lower than Morrisons.

The average price of a litre of fuel at motorway fuel stations rose by nearly a penny a litre with petrol going up 0.67p to 182.08p and diesel 0.83p to 192.34p.

Ask HJ

Has using E10 caused my fuel economy to drop?

I have a 2019 Honda CRV 1.5 AWD with 11,000 miles, full service history and not due a service until May 2022. I had been averaging around 34/33 mpg until recently. My fuel economy has dropped to 28/26 mpg. My route hasn't changed I believe I have been using the new petrol E10. Is this mpg drop to be expected with the recent formula change to petrol? If this is the case I would be using approximately half a gallon more petrol for every twenty pound spent at the pump. I don't see how this could be any benefit to the environment burning more fuel only an advantage to Government taxes and the fuel companies.

I'm not convinced this has anything to do with the switch to E10 fuel. This generation of Honda CR-V was launched in 2018, which means it has been developed (and WLTP) tested with E10 fuel. And even if E10 did increase fuel consumption, I would not expect it to result in a dramatic 20 per cent cut in mpg. It could simply be caused by the cold weather (fuel economy can drop by 15-25 per cent in the winter) or it may be an issue with the fuel or air filter. Alternatively, there may be a fault with one of the spark plugs or oxygen sensors. When did you last check your tyre pressures? A slow puncture of low PSI rating will inevitably increase rolling resistance and result in more fuel use.

Answered by Dan Powell

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