It was not so long ago that we saw petrol stations with prices as low as 75p per litre. But slowly and surely the price of filling up has increased.
Currently we see an average price of 115.9 pence per litre. Add that to the cost of insurance and parking and the thought of jumping on the bus seems far more appealing. The average price of diesel is about another penny on top. Yes, a penny isn't a lot of money. But add it all up over the year and it makes a difference. What's more the price is set to increase by a further 3p in fuel duty on the 1st of April. In July 2008 you may remember that we saw petrol reach a high of 119.7p. Although if the 3p fuel duty rise were not to occur this year, we would still be expecting a price of 120p per litre in the very near future.
The rise in 2008 was due to the extremely high price of crude oil. Being the main ingredient in petrol it is understandable why we saw such a high price of the energy our engines need to run. I did resort to feeding my father's car with Pro-Plus once, surprisingly this was to no avail. Now we see huge rises on the way, which are not due to the high price of crude oil. As it stands crude oil is $78 a barrel which is almost half the price it was in 2008. At the time of the last high, crude oil was $147 a barrel, I kid you not!
The price of petrol has risen due to a chain of events not unlike knocking over the first in a line of dominoes. First the recession, this led to many oil refineries having to close, which in turn caused a shortage in supply of refined crude oil, which we know as gasoline. Are you ready for the next line of dominoes? The recession (surprisingly) has led to a weak pound which in turn has led to the rise in the price of our precious petrol. This is because we do not buy petrol in £'s it is bought in $'s. The actual rise in the price of gasoline is around 17%. Even though the petrol companies could afford to hold back, we still see the price affecting our poor pockets.
A member of the Labour party who is also a part of the business select committee namely, Lindsay Hoyle, says that we as motorists are being 'legally mugged', as opposed to illegally mugged, where we only need to hand over our mobile phone and carry on. This I am sure will ripple the waters of our finances for a long time to come.
Now, if you would care to line up the dominoes once more. The recession has led to the average family having to live off of a much lower income, which in turn makes us less able to pay for the high priced petrol. Then as the small spotted black pieces continue to fall, this leads to debt which in turn leads to not being able to pay our taxes, which would lead to recession although, we are in a recession already, which leads to, and so on and so forth. As I said the pennies will mount up, we are expecting to pay an extra £364 per annum.
Let's not bother with the dominoes for this one. A third of all hauliers could be pondering a cut in their workforces according to the Freight Transport Association (FTA), which in turn leads to, well you get the picture. High VAT coupled with high duty plus soaring oil prices equals the false activation of air bags as motorists bang their heads on the steering wheel!
Duty has risen nearly six pence and is due to rise another three within a month, leaving us with a total of 59 pence. The conservative MP Nigel Evans believes that there should be an investigation into why the prices are so high in our petrol stations. Although I'd rather that not happen as no doubt this would be at the expense of the taxpayer.
One of the reasons behind the rise in price of gasoline is that the refining process has been changed. This was to prevent problems such as engine lock, which does save us money, but much like insurance we seem to be paying for something that probably will not happen. The larger petrol companies will not be losing out as they source their petrol from their own refineries, so why are we left out of pocket? Or rather out of car and onto the bus? BP will argue the fact that their profits had fallen 45% last year but even so their pre-tax profit still stands at £8.75 billion! A representative of the UK petrol industry association has said the main reason for the rise in petrol prices is the weak pound which has stemmed from the recession.
Maybe it's best we stay in for a game of dominoes, rather than driving to the cinema?