Petrol is back above £1.20-a-litre: Fuel prices return to pre-pandemic levels

Petrol prices are now above what they were before the pandemic lockdown, new figures show.

Unleaded in the UK averaged more than 120p-a-litre yesterday despite demand being far lower than it was in March 2020 – and while the nation remains in the depths of the latest lockdown.

Average petrol prices climbed to 120.01p while diesel reached 123.25p per litre.

The AA said the higher pump charges would come as a ‘nasty surprise’ to motorists who haven’t filled up at forecourts since before the third lockdown was put in place, when both petrol and diesel were 5p-a-litre cheaper than they are today.

A month ago, the UK average petrol price was 115.12p per litre and diesel was 118.53p, based on figures for 18 December. 

On 3 January, the respective average prices climbed to 116.51p and 120.05p-a-litre and have continued to increase throughout the month, with retailers adding another 3p-a-litre to the price of both fuels before the end of this week.  

With petrol now up to 120.01p, it means drivers are paying an extra £3 to fill the 55-litre tank of an average family car than they were a month ago. 

It also means that today’s fuel prices are now above what they were before Prime Minister Boris Johnson announced the first restrictions to prevent the spread of the virus some 10 months ago.  

On 23 March 2020, the start of the first lockdown, petrol at the pump averaged 119.86p-a-litre, while diesel cost 122.59p.

The day prior was the last time petrol was above £1.20 – unleaded priced at 120.55p-a-litre and diesel at 123.15p. 

Fuel prices crashed soon after the initial Covid measures were put in place as a combined impact of reduced demand and oil prices nosediving following a production dispute between Saudi Arabia and Russia. 

With traffic volumes falling by as much as 80 per cent and an oversupply at the start of the first national lockdown, average petrol fell as low as 106.48p on 19 May and diesel crashed to 111.76p six days later. 

On 11 May, unleaded was available at supermarket forecourts for £1-a-litre – only the second time in over a decade that petrol had dipped below a pound when the UK was in the midst of the 2008/2009 financial crash. 

Unleaded prices last fell below £1-a-litre at the end of 2015, when supermarkets were embroiled in a fuel price war to encourage drivers to visit their stores over the Christmas period.  

Petrol at £1.20-a-litre will be a ‘nasty surprise’ for drivers

While fewer motorists are on the road at the moment, the AA said plenty of drivers will be stung by the higher cost to fill up because many are still completing short journeys for essential trips and gradually emptying the tanks of their vehicles.

On Monday, car travel was at 54 per cent of pre-lockdown levels, according to government statistics, with road transport in general at 61 per cent the usual volume without the pandemic.

Commenting on average petrol prices rising above £1.20-a-litre this week, AA spokesman Luke Bosdet, said: ‘Many drivers in lockdown are using their cars for short trips, such as to the supermarket, and are filling up much less often than usual. 

‘If this week they have gone to the fuel station for the first time since December, they will have seen a 4p to 5p-a-litre leap in petrol and diesel prices.

‘That will be a nasty surprise and compound their lockdown frustrations.’

Earlier in the week, Bosdet and the AA had accused retailers of overcharging drivers by 2p-a-litre at the pumps.

In the last month, the price of oil had risen by $5 to $6-a-barrel, the motoring organisation pointed out.

Generally speaking, a $2 change in the price of oil is met by a 1p-a-litre change at the pumps, suggesting that retailers are are adding a little extra on top – something the AA coined a ‘lockdown bonus’ for fuel sellers. 

It also pointed to the apparent end of supermarket fuel price wars that had rattled on throughout 2020 – usually sparked by Asda reducing its price ahead of rivals.

Figures from earlier this week showed that there was a 3p-a-litre gap between the cheapest supermarket retailer – Asda at 113.50p-a-litre for petrol – and the most expensive, which is Morrisons at 116.87p.

As a result, non-supermarket retailers have pushed their prices higher also. 

In response to the AA’s claim of forecourt operators adding a ‘lockdown bonus’ to their fuel prices, Brian Madderson, chairman of the Petrol Retailers Association, said: ‘Petrol stations are rightly regarded as ‘essential’ businesses by Government yet the independent sector struggles for financial sustainability as fuel volumes plummet again during this latest lockdown. 

‘Unlike the big supermarkets buoyed by massive increases to grocery sales, independents have to hold onto every penny of margin to avoid cutting staff and reducing service levels in a tight market.’