The key factors affecting the price of fuel right now
It’s no secret that fuel prices have been higher than ever before in recent times, affecting everyone from commercial drivers to private commuters. And while the last 12 months have seen a slight stabilisation, they’re still a long way from what they once were.
According to the RAC, in 2022 diesel prices reached an average of a staggering 178.13p with petrol prices not far behind at 165.06p per litre. Thankfully, there has been some decrease in 2023 with fuel prices currently sitting somewhat lower with an average of 157.58p per litre for diesel and 146.52p for petrol.
At Van Discount. we understand how stressful it can be to have to shop around to get a good deal on petrol, especially when you’re not all too sure why the prices have risen so astronomically in general. Now, you can always be sure of the very best deals on our new vans – we save our customers an average of 40% off the Recommended Retail Price – but when it comes to fuel, things are a little more unpredictable. So, here’s what you need to know as things stand.
Why did fuel costs rise?
Unfortunately, there is no concrete answer for the reason behind the rise. However, there are a few working theories. For example, there’s a sizeable number of economists pointing to the war between Ukraine and Russia for the dramatic price increase. Russia is a major global player in oil, so the conflict sent the oil and gas prices soaring. The World Economic Forum stated that since the Russian invasion of Ukraine, the ‘already inflated oil prices have skyrocketed to over $110 per barrel.’
However, even before that, fuel prices had started to creep up since the easing of COVID-19 restrictions before the war between the neighbouring countries had even begun. And with fuel retailers and supermarkets having such a lucrative and profitable year (more so than usual) it left many questioning whether the war alone was the reason for the price hikes. The Competition and Markets Authority (CMA) stated that the pandemic weakened competition and “due to a decision by the traditional price leaders to compete less hard“, prices had increased dramatically since 2019.
The RAC reports that supermarkets have doubled their fuel margins since the war in Ukraine started. RAC spokesman Simon Williams stated that the big four supermarkets (Asda, Tesco, Sainsbury’s and Morrisons) have “benefitted considerably on the back of the dramatic wholesale market fluctuations caused by the start of the war in Ukraine” and that they “put off reducing their prices when the wholesale price tumbled”. However, despite this, supermarket still remain the cheapest places to fill-up with Asda typically being the cheapest.
When will fuel costs come back down?
Right now, it’s difficult to say. A big part of the issue is that the price rises are due to a number of interweaving factors, most of which are complex and ever-shifting. The aftershocks of the pandemic are likely to be felt for some years yet, and there’s not yet any firm end in sight to the war in Ukraine. For now, the best most drivers can do is to drive carefully, and perhaps take care to use a couple of our handy fuel saving tips for the fuel crisis.
We don’t claim to have any specialist insight into the economy here at Van Discount – but if you’re planning on buying a new van, we can certainly help there! We always offer amazing deals on brand-new vans to cater to all your needs. As we touched on above, we can save you an average of 40% off the standard rate of a new van, which can translate into savings worth thousands of pounds! So whether you’re a private buyer or a fleet manager, you can count on us to provide you with brilliant savings and a seamless buying experience!