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SPIKING FAST: Fuel price surge puts fresh pressure on taxi and driver earnings
Taxi and private hire drivers face another increase in operating costs after average UK petrol and diesel prices climbed sharply within the space of a week.
The RAC said the average price of unleaded had risen by 5p a litre to 167.17p, while diesel increased by the same amount to 188.63p. The organisation linked the increases to surging wholesale prices, with a barrel of oil averaging $96 during the previous week.
For taxi and private hire drivers covering high annual mileages, sustained fuel price increases can have a material effect on earnings. Diesel-dependent operators are particularly exposed, with the average price now more than 21p a litre higher than unleaded.
A licensed driver buying 50 litres of diesel would pay approximately £94.32 at the reported average price. A 5p-per-litre increase adds £2.50 to each fill, which can quickly accumulate for drivers refuelling several times each week.
RAC senior policy officer Rod Dennis said: “Drivers are having to dig ever deeper into their pockets every time they fill up, and there’s no sign of any relief yet.
“With the cost of a barrel of oil having averaged $96 for the last week, wholesale prices are surging and that’s already feeding through to prices at the forecourt. The average price of unleaded has increased by 5p a litre in just the last week to reach 167.17p, while diesel has gone up by the same amount to 188.63p.”
Dennis said the change meant the cost of filling a family-sized car had increased by £2.75 over the short period. The impact on working vehicles may be greater because taxis and private hire vehicles typically cover more miles and refuel more frequently than privately owned cars.
Fuel remains one of the largest variable expenses faced by self-employed drivers and small fleet operators. Unlike private motorists, licensed drivers cannot always respond to higher prices by substantially reducing their mileage because distance travelled is directly connected to revenue.
There can also be a delay before higher costs are reflected in passenger prices. Hackney carriage fares are generally set by licensing authorities, while private hire prices are determined by operators or booking platforms. Drivers may therefore have limited ability to recover sudden fuel increases immediately.
The RAC warned that further increases could strengthen calls for government intervention as fuel duty is scheduled to begin rising from January.
Dennis said: “As things stand, fuel duty, which, together with tax, accounts for half of the cost of every litre of petrol we buy, is set to start rising from January but we believe there is a very strong case for leaving it at its current level, at least until the end of the Parliament.”
He added that the continuing US-Iran conflict left drivers with few options beyond driving efficiently and comparing local forecourt prices. Further rises would add to the financial pressure on taxi and private hire businesses already managing vehicle finance, insurance, licensing, maintenance and compliance costs.
