High fuel prices are causing pain for motorists. Some have even taken part in “go slow” protests on motorways. Can the cost of petrol and diesel be controlled?
Novelty horn playing
The Guardian
That’s the sound of a fuel price protest…
On Monday last week, drivers took to the roads to express their anger at soaring fuel costs.
They were small in number… but big in impact.
The protestors planned a “go slow” protest. Basically, just driving down the motorway incredibly slowly. The aim was to disrupt traffic – and get attention for their cause.
It worked.
Traffic tailed back for miles on motorways across the United Kingdom.
There were jams in Gloucestershire, Devon, Yorkshire, Essex and Aberdeenshire.
Some roads even had to close: the M4 bridge that crosses the Severn into Wales was shut for hours.
“Now police are warning of serious disruption throughout the day as protestors target motorways in a demonstration over high fuel prices. Long motorway queues are forming already as rolling roadblocks have brought parts of the M4 to a standstill…”
Sky News
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Filling your tank has never been more expensive than it is now.
For months, prices have been breaking new records on an almost weekly basis.
And the latest numbers are pretty steep:
“Fuel prices have risen to record levels in recent weeks, the average price of a litre of petrol across forecourts in the UK hit over 1.91, a litre and almost two pounds a litre for diesel in the last 24 hours.”
5News
But why are they so high?
When pandemic restrictions eased off around the world, demand for fuel rocketed, sending prices up.
Prices increased even more when Russia invaded Ukraine – and European countries and the US put sanctions on Russian crude oil.
The cost of crude has come down since then and so has the wholesale price of fuel – but consumers are not seeing that reduction when they fill up at the forecourt.
Some people are blaming oil refineries for taking a bigger cut: they’re buying in crude oil at the cheaper, wholesale price – but the suspicion is that they’re not passing on the reduction in price to the petrol stations where the refined oil is sold.
The UK Competition and Markets Authority – the body that makes sure that businesses are operating fairly – is investigating the refineries to make sure they aren’t keeping prices artificially high.
Here’s Sarah Cardell of the CMA, speaking to Sky news:
“What we found is there are two main factors driving the prices up. one is the increase in global crude oil prices that accounts for about a third of that overall increase but the other big factor and this is something that we’re particularly focused on now is that the gap the difference between that crude oil price and the wholesale cost of petrol and diesel coming out of the refineries that difference has actually more than tripled over the last year and that’s something we really think is essential to get to the bottom of.”
Sarah Cardell, Sky News
But their full report isn’t going to come out until autumn…and in the here and now, the high costs are really hurting motorists’ wallets.
Inflation and the cost of living crunch are bad enough. Sky high petrol prices are only adding to the pain.
Here’s one of the protestors, an HGV driver, speaking to the Daily Mirror:
“I’m here because I’ve lost my job because of the fuel and the greedy people at the top taking all of our money. We pay tax on every aspect of our lives and that needs to stop.”
Daily Mirror
Can the government do anything to help with the high prices?
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One thing the government could do is to further reduce the amount of tax we pay on fuel.
Rishi Sunak – the former chancellor – cut fuel duty in his Spring Budget earlier this year.
Rishi Sunak
“I’m going to help motorists today. I can announce for only the second time in 20 years, fuel duty will be cut, not by one, not even by two, but by 5p per litre. The biggest cut to all fuel duty rates ever.”
A number of Conservative leadership candidates have committed to further reducing fuel duty or VAT on petrol and diesel.
France has cut its fuel duty by around 14p. In Spain and Ireland there’s been a 17p reduction, and Germany has slashed its fuel duty by 25p a litre.
That kind of measure might help motorists out a bit in the short term, but there’s a strong argument that cutting fuel taxes won’t make things better long-term – especially when it comes to greenhouse gas emissions.
The country should really be concentrating on sustainable ways of reducing the amount we rely on fossil fuels: including petrol cars…
Cutting fuel duty will only take money away from the public purse: money that could be used to do things like subsidise home insulation costs – or to make public transport a better and more affordable alternative to car travel.
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In any case, to really stabilise fuel prices in the next few months will probably mean going to the source and speaking to the refineries.
Westminster can put political pressure on them to bring their margins back down again. That’s what President Joe Biden has tried to do in the US.
Last month he wrote to fuel refining companies to tell them that it was “not acceptable” to be passing on high prices to ordinary people at such a tough moment.
We’ll find out more about exactly what’s happened to fuel prices – and why – when the CMA publishes its report later in the year.
But until that happens, pain at the petrol pump looks set to continue.
Today’s episode was written by Ella Hill, and mixed by Studio Klong.
