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Fuel prices skyrocket in lockdown

By Stephen Turvil | February 2, 2021

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Motorists suspect ‘lockdown price bonus’ for retailers as prices rocket in January 2021 (and how to save money).

Fuel prices skyrocket in lockdown

UK fuel prices rose close to pre-pandemic levels amid speculation that retailers added a ‘lockdown bonus’ by late January 2021. Compared to the previous month, the average price of unleaded increased from 114.5 to 118.9 pence per-litre (+4.4 pence), the AA said. diesel has risen from 119.3 to 122.2 pence per-litre (+2.9 pence).

Let us put these price hikes in perspective. If your vehicle has a 55-litre fuel tank, it costs £65.40 to completely fill it with unleaded petrol towards the end of January 2021. That was compared to £62.98 weeks earlier (+£2.42). In contrast, the same amount of diesel cost £67.21 compared to only £65.62 a month before (+£1.60).

Lockdown bonus?

But why such rises? Naturally, the price of crude oil influences how much you pay at the pump – and oil got more costly. It was therefore reasonable for retailers to increase their prices accordingly. However, there is speculation that some retailers increased their prices more than necessary to compensate for the oil price hike. Some motorists have referred to a ‘lockdown bonus’. 

However, it is debatable whether this accusation is fair. Why? Because people are travelling less in lockdown so retailers sell far, far, less fuel. That is the reality of the ‘stay at home’ order from the Government. However, retailers still have to pay their staff, have money for utility bills, and maintain their sites. These costs have not vanished even though sales have fallen. 

On this basis, it might be reasonable for retailers to increase their prices ‘slightly more’ than required to compensate for the higher cost of oil. They have to either stay profitable – or close. 

Save money on fuel

Whatever the rights/wrongs of the current prices, you can minimise how much you spend on fuel. Pick your retailer carefully, for example. A motorway service station is likely more expensive than a rival in town. Why? Because the latter probably has more competition. Furthermore, you can minimise fuel consumption by maintaining your vehicle and optimising your driving style. Simply:

  • inflate the tyres to the correct pressures
  • keep the windows and sunroof closed to optimise aerodynamic efficiency (also remove any unnecessary roof boxes)
  • fix faults that increase consumption, such as sticky brakes
  • accelerate gently to minimise engine revolutions
  • switch off the engine if the car is stationary
  • stick to the speed limit
  • maintain a consistent speed rather than accelerate and decelerate unnecessarily (cruise control makes this easier)

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