YOUR FREE PETROL PRICE INDEX
Why do fuel prices change? What makes them fluctuate so much? And why do they never seem to stay the same for long? The truth is, the factors that contribute to these changes have been (and always will be) complicated, inter-connected and ever-changing. And this hits more than our pockets as higher fuel prices push up the cost of goods across the board, including the price of the food we eat and the clothes we wear. But why does this happen in the first place? We’ve asked our experts to assess and review years of fuel price data to reveal the factors that create these changes.
MAY REPORT & BREXIT WARNS OF IMMEDIATE PETROL PRICE INCREASES
An EU exit and surging oil prices could see the pound weaken and UK petrol prices rise. Bad news for us, but how is this affecting prices abroad? By using our free index, you can check, track and compare UK prices against other countries around the world. You can see if they’ve been affected by global events in the same way we have, and how their current prices matches up against ours.
Fuel Price Trends by Year
The war in Iraq saw oil prices rise by 19% compared to the previous year, due to the significant amount of oil reserves in the country and disruption to production. This took place as global demand for petrol rose, which also contributed to the increase in price. [Source]
Petrol prices rose thanks to a number of factors in 2004. The 2002-03 general strike in Venezuela significantly disrupted the levels of oil coming out of the country, which meant oil supply levels were not as high as they should have been this year.
Usually this would not have been of huge concern, but when combined with other events it hit harder than expected. Oil production in Iraq and Saudi Arabia was being sabotaged, while unrest in Nigeria also contributed to the problem.
On top of this, rising demand for oil from China and other industrialised countries made things more costly. [Source]
This year set a new record for oil prices. Tensions over North Korea played their part, as did ongoing problems in Iraq. This was coupled with a new war between Israel and Lebanon, while demand for petrol rose by 1.9%. [Source]
In October, concerns about the Turkish military being sent into Iraq to fight the Kurds caused fears that supplies of oil might be disrupted, meaning oil prices rose. A weakening US dollar also contributed. [Source]
The Gaza War of 2008-09 caused oil prices to rise at the beginning of the year. This was short-lived as the war ceased after three months and fears eased. [Source]
The first half of 2014 saw a fall in petrol prices for a number of reasons. Oil production in Libya and the North Sea was up, there was good economic news from Japan, while on the 20 January the Joint Plan of Action agreement between Iran and the P5+1 countries came into force. [Source]
By June petrol prices were rising again. Contributing factors were the conflict in Ukraine, the annexation of Crimea by Russia, and increased tensions in Libya. One of the most significant though was the Islamic State’s Northern Iraq Offensive, which saw the fall of the cities of Mosul and Tikrit, while Kurdish forces took control of Kirkuk, an important oil hub. This event also highlighted the weakness of the Iraqi military, raising fears about future security in the region. [Source]
A combination of slowing Chinese economic growth, a strong US dollar, and high levels of oil supplies saw oil prices hit their lowest levels since February 2009. Petrol prices have been falling month on month for a year. [Source]
The beginning of 2016 may see oil prices plummet with the return of Iranian production to the market. [Source]
The bliss of low fuel prices may not last long though with the Spending Review indicating that the Treasury’s takings from fuel duty will rise. Brexit also looks to affect UK fuel prices – and actually seems to have done so already! From January 2016 to May 2016, the cost of a litre of petrol jumped from 102p per litre to 109p, showing that the Brexit may have already impacted UK fuel prices.
By exiting the EU the pound may become weaker and prices could soar to 121p a litre. If this rise takes place it is expected to add £500 to family petrol bills. However, we believe this is a slight exaggeration. Leaving the EU could also enable the Government to lower VAT on fuel below the current 15% floor set by Brussels. Slashing VAT in half to 10% would knock 9p off a litre at the pump – a bumper saving for millions of motorists. Therefore, if we were to leave the EU and the pound were to weaken, we can predict a more sensible 9.2p per litre rise. [Source]
This assumption is based purely on the belief that the value of the pound will crash. If it doesn’t, then it will just be down to George Osborne as to what we pay at the pumps.