FUEL PRICE SURGE HITS DRIVERS: Petrol and diesel costs soar again

The RAC has reported a significant hike in fuel prices over the last three weeks, with petrol and diesel costs surging by more than 3p and 4p per litre respectively.

This uptick has spiked the cost of filling up a family car or taxi by approximately £2, placing additional financial pressure on drivers across the UK.

Petrol prices have climbed from 140.2p to 143.4p per litre from 29 January to 18 February, while diesel prices have leapt from 148p to 152p in the same timeframe. This rise comes after a period of declining fuel costs, with petrol prices dropping by 17p over the last three months and diesel by 15p, reaching lows not seen since mid-October 2021.

The recent price increases are attributed to a spike in oil costs, which have been trading above $80 a barrel for most of the past month, a significant rise from previous weeks.

Impact of Fuel Rises on Taxi Drivers and Fares

The surge in fuel prices directly impacts taxi drivers, who rely heavily on fuel for their day-to-day operations. The cost of petrol and diesel constitutes a substantial portion of their operational expenses. As fuel prices rise, taxi drivers face increased costs, squeezing their margins and, in many cases, forcing them to work longer hours to maintain their earnings.

To cope with these rising costs, taxi operators often have no choice but to pass on the burden to consumers in the form of higher fares. Consequently, local taxi users may notice an increase in the cost of their journeys when tariffs are next reviewed. This price adjustment is a necessary measure to ensure that taxi services remain viable and sustainable in the face of fluctuating fuel prices.

RAC fuel spokesman Simon Williams said: “News that fuel prices have bottomed out and are now on the rise again is bad news for drivers, and possibly the economy and future inflation rates, too.

“While we’re not expecting prices to shoot up dramatically, it appears that oil is trading up, which in the absence of a stronger pound, means wholesale fuel costs more for retailers to buy in. The result is higher prices at the pump and more expense for the every-day driver.

“The Red Sea attacks by Houthi rebels, which are forcing tankers to avoid the Suez Canal and instead go round South Africa’s Cape of Good Hope, are clearly playing their part, but so have global refinery maintenance closures, the start of America’s driving season and UK retailers buying more fuel stocks ahead of the Budget to protect against a possible fuel duty hike by the Chancellor.

“Despite these factors, we ought not to see forecourt prices go up too much more from where they are today, but a lot depends on how much margin the biggest retailers decide to take.

“Positively for drivers, supermarket margins are lower than they were in January, but they are still significantly higher than they were prior to the pandemic and Russia’s invasion of Ukraine.

“If a ‘new normal’ supermarket margin were to settle around 7p, drivers would get a fairer deal. Last year, RAC data shows they benefitted from an average mark-up of 10p on every litre of fuel sold as opposed to just under 6p in 2019.”