Why Are Fuel Prices Rising?

You may have noticed if you’ve visited a petrol station recently that fuel prices are reaching astonishing highs. But why exactly is this?

Conflict between Russia & Ukraine

Russia is a huge supplier of oil, producing approximately 4.5 million barrels a day, and the current conflict going on has impacted the supply and distribution to Europe. Some of the sanctions that have been imposed on Russia by the UK, America and other countries have meant that we’re no longer going to buy oil or gas from them. Due to this, other countries are being relied upon to increase their supply, but there’s a question of whether they have the capacity and resources to do this efficiently and quickly enough, after the impact of the coronavirus pandemic. According to data from the RAC, as of March 10th 2022,  petrol is costing approximately 161p per litre while diesel is at 170p per litre, and expected to rise. 

The Coronavirus Pandemic

Something that has affected fuel prices for the past few months has been the coronavirus pandemic. During the lockdown, demand plummeted due to everyone not having to use their vehicles as often, and consequently the fuel prices dropped.

Many crude oil companies slowed their production, bringing the global price of crude oil down, but after the lockdown restrictions eased, demand rebounded. However, they were still cautious about fully ramping up production to pre-pandemic levels again, as the pandemic is still ongoing, and if new lockdowns are imposed, this means demand will plummet again, and consequently they’ll lose out on money.

The pandemic also affected supply disruption, mainly due to staff being furloughed.

Will fuel prices come down?

Unfortunately, it doesn’t look likely with the developments currently happening between Russia and the Ukraine. This is causing major uncertainty in markets and other countries integral to the world's oil supply are struggling to meet production targets. 

How can I save money on my fuel?

Drive efficiently - Try driving in a higher gear where you can if you have a manual car and be gentle on the accelerator. Also try to minimise weight in your car as much as possible.

Consider an electric car - If you opt for a complete electric powered vehicle rather than a hybrid, the rising fuel costs won’t affect the cost of running your vehicle.

Shop around - You can use a website like FuelGenie to explore the nearest petrol stations to you and compare prices.

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