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Turbulent year for the retail fuel market – what were the causes?
19/4/2023
9 min read
Feature
Last year, 2022, was a turbulent year for all retail fuel users – due to the Ukraine war, severe weather and supply shortages – the list goes on. The UK retail fuel market was also subject to turbulence. Catherine Cosgrove MCLIP, FEI, Knowledge and Information Officer at the Energy Institute, puts us in the picture.
In the UK forecourt retailing sector, 2022 was dominated by ever-rising road fuel prices. Average unleaded ultra-low sulphur petrol (ULSP) prices for January 2022, although slightly down on December 2021, at 145.70 p/l were 23% higher than the average pump price in January 2021. Prices continued to rise in February 2022, and then on 24 February Russia invaded Ukraine.
The effect on the crude oil market was immediate, as was the knock-on effect on the price of refined oil products. Brent crude reached $139/b on 7 March 2022, its highest level for 14 years. By April, the average price of a litre of ULSP had jumped to 161.63 pence. In the March 2022 Spring Statement, the UK Chancellor of the Exchequer reduced the duty on all road fuels by 5 p/l, from 58 p/l to 53 p/l, although VAT remained at 20%.
But pump prices continued to rise, reaching an all-time average high of 188.41 p/l for ULSP in July 2022. The Spring Statement on 15 March 2023 has seen Chancellor Jeremy Hunt retain the 5 p/l drop in duty rate for another year, despite the average price of petrol dropping to 148.65 p/l for February 2023.