Welcome to the Five Pound gallon

As I’m sure you’ve noticed if you’ve not been hiding under a rock, after a nervous excursion to the wrong side of £1 per litre in the summer after which prices fell back, the psychological barrier of £1/litre seems to have been permanently breached in the run up to Christmas, and petrol and diesel prices have stayed firmly on the wrong side of a quid.

I noticed a couple of interesting points as prices hovered just under the magic £1.00/litre figure.

First one was that when the pump at several filling stations read 99.9p, the fuel was actually being metered out at 99.99p per litre. Now, slightly less than one tenth of a penny isn’t going to hurt filling my 50 litre tank on the bus and I wouldn’t even notice on the bike. But if you sell 1 million litres of fuel a year, all of a sudden an extra £10,000 in the bank account looks quite handy, thank you very much. And my very brief bit of research suggests that a busy supermarket site will sell several times that! I’m surprised that the trading standards let the petrol stations ’round down’ the price, given the amount of effort they put into checking the pumps deliver accurately.

The second thing was that the summer commitment by petrol companies to sell diesel at the same price as unleaded went out the window. You might have blinked and missed that one of course, because it was over almost before it started.

It’s also worth pointing out that Shell posted record profits in September last year too.

And just before the usual “blame Labour” backlash starts it was the Tories who introduced the Fuel Price escalator, and Labour who scrapped it. The tax is currently around 65% of the total price if I’ve done my sums right, but when the Tories left power in May 1997, the tax was 77% of the pump price. Although this is one of the world’s highest taxes on road fuel, France is now approximately the same price as the UK and the Netherlands and Belgium are slightly higher for unleaded. Diesel’s cheaper in France and Belgium though. And for a real bargain, head to Andorra, Ireland or Estonia!