Latest Update on Cost of Living: Petrol Prices Reach Milestone, Supermarket Slashes Prices on 200 Items
In a noteworthy development, petrol prices in the United Kingdom have recently surged to an average of 150 pence per litre, marking the first time they've reached this level since January, as reported by the AA. The latest data underscores the growing financial pressures facing the nation.
The figures reveal that the average cost of unleaded petrol now hovers at 150.1 pence per litre, while diesel has climbed to 152.41 pence per litre. This escalation in fuel costs compounds the economic challenges already confronting the country.
Luke Bosdet, a spokesperson for the AA, noted that the recent increases in wholesale fuel costs seem to have temporarily plateaued. However, he emphasized the challenge of identifying fuel stations offering prices 4 to 5 pence per litre cheaper than the norm, making it crucial to know their locations.
This report comes on the heels of an analysis by the RAC, which disclosed that the UK's major supermarket chains - Tesco, Asda, Sainsbury's, and Morrisons - have effectively doubled their profit margins on fuel since Russia's invasion of Ukraine in February 2022. These profit margins have surged from 4.7 pence per litre before the conflict to approximately 10 pence per litre presently. Consequently, drivers have been paying an extra 6 pence per litre for fuel over the past year.
In 2016, the combined profit margins for petrol and diesel were a mere 2 pence, gradually increasing to 6 pence in 2021, before spiking dramatically to 9 pence in 2022.
Meanwhile, Ofgem is set to announce a new energy price cap today, which will result in reduced gas and electric bills. This cap, updated quarterly, dictates the maximum rates utility companies can charge customers for each unit of electricity and gas consumed. However, it should be noted that while the new cap will be disclosed today, it won't be enforced until October 1.
Currently, the cap stands at £2,074, and analysts anticipate it will drop to around £1,925, potentially saving consumers roughly £150 annually starting in October. It's important to clarify that the energy price cap doesn't restrict the overall amount customers pay for their energy. Instead, it limits two key factors: the maximum rates energy firms can charge per unit of gas and electricity, and the maximum daily standing charge, which covers the cost of grid connection.
It's essential to understand that the total annual cost for each customer can still vary based on factors such as household size, energy usage, and the type of energy plan. The cap applies exclusively to those in England, Scotland, and Wales on standard variable (default) tariffs. It excludes individuals on fixed-rate tariffs and those using oil for heating.
Previously, the government's energy price guarantee (EPG) had partially shielded households from price hikes. However, this support ceased in July when the current £2,074 price cap took effect.