The AA thinks pumped-up petrol prices knocked £1bn off high street spending
Higher petrol prices in 2017 cost drivers £1bn in money that may otherwise have been spent on the high street, according to new research from breakdown cover provider The AA.
A rise of nearly 9p per litre in the average price of petrol last year siphoned off a huge chunk of consumers' spending capacity, The AA has said.
In 2016, the pump value of the petrol consumed was £18.77bn. Last year, it was £19.85bn – an increase of £1.08bn.
This is despite recent statistics from HM Revenue and Customs (HMRC) which revealed that demand for petrol in the UK fell from 17.101bn litres in 2016 to 16.785 bn litres last year.
“Typically, a family’s car gets filled up twice a month, leading to annual consumption of around 1200 litres a year. With petrol last year averaging 9p a litre more expensive than in 2016, a £108 hole opened up in that family’s spending because of higher fuel costs,” says AA fuel price spokesman Luke Bosdet.
“The most telling part of this retail tragedy is that the benefit of better car fuel efficiency and people driving less, which should lead to people spending less on fuel and more in the high street, has been eclipsed by yet another pump price surge.
As for a future far less dependent on fossil fuel, it is likely that alternative energy costs will also suffer from occasional price swings. The difference is that, unlike road fuel, the government has a domestic energy watchdog looking out for the consumer.
According to The AA's research, there are indications that the UK might also finally be at a tipping point in its consumption levels of fossil road fuels.
Though petrol consumption has been on the decrease for some time, diesel demand has generally made up for the shortfall. Any fall in combined demand has generally been in reaction to events such as such as fuel protests, price shocks or industrial action.
But last year, UK traffic levels hit record highs for nine consecutive quarters and still combined fuel demand was slightly lower than in 2016.