posted 6 years ago

The Budget 2013 - Are Fuel Prices Really as Bad as We Think?

2013 budget for motorists

The budget announcement today (20 March 2013) could heap more misery on UK drivers, with tax increases on fuel making a regular appearance in recent years. With this in mind has looked at fuel price increases from March 2008 to March 2012 to see just how much more we are paying. The fuel statistics we looked at included the UK average price of fuel in litres (using unleaded 95 octane), the tax percentage and tax in pence, all courtesy of the AA fuel price report.

With the fuel stats being the ‘variables’, every good scientist knows you also need ‘constants’ in order to have a fair comparison. We thought the nation’s favourite car model according to sales; the Ford Fiesta would be perfect. Our specific choice was the 1.4 Hatchback Edge with a combined fuel consumption of 49.5 miles to the gallon. We also used 12,000 miles as the average driven by UK drivers over a year.

Running a car for a year in 2008

2008 was a great year: we had a British F1 World Champion, we didn’t have to watch England get knocked out on penalties in a major football tournament and we beat Australia in the Olympic medals chart. According to the AA stats we were paying less than £1 per litre for our petrol too. (In fact the average for March 2008 was 90.6p per litre.)

And it gets better. Of that total cost, only 70.8% of it, that’s 64.14p, went to the tax man. Those were the days…

Running a car for a year in 2012

2012, another great year for the UK, thanks to the London Olympics and Jubilee it was a great year to be British… But was it great for British road users? Fast forward four years from 2008 and we can see that fuel prices went up from 90.6p per litre to 138.5p. That is an increase of 47.9p per litre in just four years.

Of that 138.5p, 58.5% was tax, contributing 81.02p per litre. However, to look at this from a different angle, fuel providers were pocketing 26.46p per litre in 2008, whereas they were making 57.48p in 2012- more than double the figure from four years previous.

So how much worse off are we really?

Looking at the bigger picture, based on the March 2008 data we would be spending £998.49 a year to keep our Fiesta going. In 2012 we would have been spending £1526.38. This equates to an increase of £527.89 from 2008 to 2012 – an extra £43.99 a month.

2013 budget for motorists

Is there good news in the 2013 budget? If this article from the BBC is anything to go by, the answer is ‘potentially’. The potential suspension of fuel duty could help roll back the years, in terms of fuel prices, but seeing the prices of 2008 again is highly unlikely (particular with the earlier point made about fuel companies).

For some of us, that extra money could make the world of difference. It’s the same as a typical monthly mobile phone contract, or perhaps even a gym membership. Others may not even notice the difference. What side of the fence do you sit on? And what do you want to see in today’s budget? Let us know by leaving your comments below.