With the current trend of fuel price increases, are we looking at petrol reaching £2 per litre?
For the vast majority of drivers, cars are simply a tool for getting from one place to another. Most are concerned about the price of fuel but what does it mean for auto enthusiasts? Are we pricing polluters out of the market? Is this even sustainable?
As of February 2023, the current price for petrol sits at £1.49/litre and £1.69/litre for diesel. These are some of the highest levels ever experienced. Much of the cost has been attributed to the Russian invasion of Ukraine, as the Western world imposes strict sanctions on Putin, we are no longer purchasing their fuel.
The UK has access to some of the richest oil fields located around the isles and we imported 24.1% of our total refined oil from Russia in 2021. Quite frankly, solely blaming the invasion is absurd. What happened is that other oil exporters upped their prices as the world relied on them. We know supply and demand dictates the market, which was evident during the pandemic when petrol dropped to £1.06/litre.
Could we be a self-sufficient nation and pay less?
Although we have access to a lot of the oil fields, so do other Northern European nations, with Norway having the lion’s’ share of North Sea oil. We have to export fuel because that brings in the most revenue for the economy, simply providing it to ourselves wouldn’t satisfy; as money talks unfortunately.
Which is clear as blatant profiteering from the oil giants is a major cause, as is the ridiculous taxation that we face on fuel. Fuel duty is taken straight away (around 60p per litre), then the price of fuel is added and then VAT on top. With this calculation, the taxation makes up around 70% of the total cost of fuel you are paying.
The issue is that we are also at the mercy of the oil suppliers, frankly, they can charge what they like. The majority of cars on the road still burn fossil fuels to propel themselves, and that isn’t going to change anytime soon.
We also have the ecological aspect to consider. As the world moves to a greener future and with the sale of all ICE (internal combustion engine) cars to be banned in 2035 – pricing fuel of out of the equation seems to be the rhetoric.
So no, we can’t be self-sufficient because those providing it wouldn’t allow it.
What about enthusiasts?
As enthusiasts, we typically own cars that are worse on fuel and pollute more, because we enjoy them and the feeling they provide. But with the push to EV’s, it is only a matter of time until fuel may be priced out of the market because it simply won’t be required.
There is the supply and demand argument as well, if less people are requiring fossil fuels, surely the price will drop? Potentially yes, but if petrol or diesel is cheaper to buy, why would you not purchase an older vehicle that uses it? This would then cause the price to rise again and it would fluctuate.
Thus, the only way to really force us into EV’s is to keep the price of liquid dinosaurs high through taxation. £2 per litre is not out of reach if this is what is wanted.
Making fuel more expensive means that many buyers will look for more economical cars and enthusiasts cars will cease to exist. Just look at the reduction of sports car options.
So it’s all terrible then?
Not quite, there are some glimmers of hope. Porsche is working to develop synthetic fuel as much of their revenue comes from maintaining their classics. Provided this can be made for a reasonable cost – this could be the answer.
Hydrogen is also an option, it isn’t fully faultless and does have some issues. Infrastructure and the way hydrogen is refined is a problem. Until the extraction process can be solely produced on renewable energy, it won’t please the top brass.
But, for now, the price is stable and has been for a couple of months. It may take a while for petrol to ever reach £2/litre, or it may (hopefully) never happen.
So keep your V8’s and continue to enjoy them!