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Petrol price forces drivers off the roads

Filling up on fuelAre you are more likely to stay at home when the price of petrol rises? If so, you are not alone.

A theory put forward by the AA this week suggests that drivers in the UK are becoming increasingly sensitive to rising fuel costs.

It comes after sales of petrol and diesel fell sharply following price increases of a few pence per litre.

Summertime lull

The AA has based its view on what it describes as surprising official fuel-sales figures for July.

HM Revenue & Customs statistics show that during the month, British motorists bought 8 per cent less petrol and 5 per cent less diesel than in June.

Sales were only fractionally higher than in February, when they hit a record low.

The summer normally sees higher vehicle use, which results in healthier fuel sales.

But a rise in the cost of petrol of around 4p over the course of July appears to have persuaded many people to buy significantly less.

Economic confidence

This is despite the fact that good weather and returning economic confidence sent retail sales soaring.

AA president Edmund King says: "It's staggering that when brilliant weather sent consumers into the shops and gave the UK's retail sector a boost, the opposite happened at the pumps.

"Not only are petrol sales shadowing the record lows of this winter, but are lower than last July which included a week of Olympics football, the opening ceremony and initial events."

King adds that retailers' own figures showed that spending on the likes of barbecue food, alcohol and outdoor furniture had risen sharply during the month.

Unleaded up by 4p

"However, all those items would normally go hand-in-hand with increased driving to go to friends, parties and days out."

The average price of a litre of unleaded at the start of July was 133.7p, according to motoring organisation and car insurance provider the AA.

This rose to 135.8p by the middle of the month, and to 137.2p by the end.

King says: "The fact is that, in June, when petrol prices stabilised at more than 5p a litre cheaper than in the spring, fuel sales soared to levels last seen in November 2011.

"A spike of up to 5p a litre in July, with many AA members asking us why pump prices went up 3p in a matter of days, triggered the opposite response.

Drivers cut back on filling up

"It seems that, as each penny increase registers on fuel forecourt price boards, drivers automatically cut back – even if they're in the mood to spend elsewhere."

Although the figures show that petrol sales were down 8 per cent in July, there is no data yet on the number of journeys made.

It could be that motorists simply choose only to buy as much petrol as they need if they think that fuel prices are relatively high, rather than filling their tanks to the brim.

If this is the case, the figure for miles driven in July may not have slumped as sharply as sales, although it is still likely to be down.

More fuel price rises forecast

Unfortunately there appears to be little prospect of prices falling back soon.

According to, the average unleaded litre cost at the end of August was 137.5p, while diesel was 141.8p.

And increased concern over the ongoing conflict in Syria has pushed wholesale prices higher.

The price of a barrel of Brent Crude has risen by about 5 per cent to around $116 in the past week.

And investors are worried about instability in the Middle East, where much of the West's oil is produced.

The Petrol Retailers' Association says it is expecting an increase of around 5p per litre at the UK's forecourts as a result.

Its chairman, Brian Madderson, says: "The PRA forecast the crude oil rise nearly 10 days ago. As expected this is a grim outlook for retailers, businesses and motorists across the UK."

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What do you think?

Has the price of fuel made you think twice about using your car?

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Chris Torney

Chris Torney

Chris is the former personal finance editor at the Daily Express. He's been a journalist for more than 10 years and contributes to a wide range of finance and business titles.Read more from Chris

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