delusionofgrandeur

Just checking the average UK prices, it looks like petrol has gone up about 5p/litre and diesel about 8p/litre in the last month. The AA haven’t compiled their May report yet so I can’t say how it fits with their running total.

If I plot it back anyway, it’s showing that the rate of price increase is accelerating.

I’m particularly worried on several factors. I’ve heard from various economists that we’re not ‘feeling’ the full oil price, there’s some lag (months?) between the crude price and it’s effect on the fuel price. We might be ‘feeling’ $100/barrel now at the pumps when todays crude price is nearly $130/barrel.

Another factor is that America hasn’t gone on their summer holiday yet. Only 8% of it’s $304million population have a passport so while some will be taking domestic flights on holiday, many other’s will be ‘road tripping’ across the USA in sub 20mpg SUVs. This historically causes a spike in the fuel prices in the UK.

So what’s possible fuel wise? I could see the diesel price getting over £1.40/litre by mid summer. I suppose just one armed conflict in the wrong location could see £2.00/litre and beyond.

People are probably still considering fuel ‘affordability’ in terms of what they put in their own tanks yet they should now be considering the knock-on effect as the fuel cost adds to the delivery costs of the food they eat. The UK is a net importer of food so much will be delivered by road, rail, sea and air.

On thing is looking clear, price inflation in the UK will be tremendous in 2008.

Tags: affordability, crude oil, fuel price, inflation, road trip, summer vacation, uk, usa

This entry was posted on Tuesday, May 20th, 2008 at 9:58 pm and is filed under Automotive, Cars, Economy, News.You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.