People won't afford to be able to live: Hitchin Nub News special report on the fuel crisis - as prices rise at the pumps again
It's the topic that is gripping hard-pressed households and motorists across the nation including Hitchin.
Why are fuel prices so high?
Why are fuel prices so high - as witnessed by the whopping £1.95.9 charged by the BP Garage on Bedford Road, as we reported earlier, which was the highest ever recorded price of petrol in Hitchin.
At the time of writing, the average cost of petrol is now 182.3p a litre - up 1.6 pence from yesterday, Wednesday (June 8) while diesel hit 188.1p.
The RAC has described hikes across the country as 'truly a dark day for drivers,' while the president of the AA said that the high price of fuel has forced some motorists to sell their cars as they cannot afford to run them.
Hitchin Nub News spoke to hard-working people and businesses in our town to gauge their feelings on a subject that is becoming the number one concern of many households up and down the land, including North Herts.
A well known face in our town is the busy Keith Jones, who runs the acclaimed Keith Jones Butchers on Redhill Road.
"I was told early March that by the time we get to the end of June that [petrol] will be over £2 everywhere so it's not much of a surprise," he explained, adding: "I think that the rise is just putting more pressure on the public and small businesses. I have had to put a delivery charge onto my website for the first time in 10 years."
While another hard-working Hitchin resident, Paul Donnelly told us: 'It's getting ridiculous - my biggest concern is it does not look like it's going to slow down anytime soon.
"The government have got to step in soon because it can't continue like this. People just won't be able to afford to live."
Hitchin petrol prices - pence per litre (as of 10am Thursday, June 9, 2022).
BP Bedford Road: 1.95.9
BP Stevenage Road: 1.78.9
Esso Garage Nightingale Road: 1.86.9
Shell Garage Bedford Road: 1.81.9
As you can see, the BP Garage on Stevenage Road is the cheapest - while the BP Garage on Bedford Road is the most expensive
The story so far
Fuel prices have risen in 2022 as the cost of crude oil, used to produce petrol and diesel, has spiked. The price of crude fell sharply during the Covid crisis as travel restrictions saw fuel demand collapse.
That demand has now returned as the planet starts moving again. Russia's invasion of Ukraine has strongly added to the situation as various western countries shun Russian oil. A steep fall in the value of the pound against the dollar over the past year has also pushed up wholesale costs for petrol retailers in the UK.
After the confidence vote in Boris Johnson's leadership on Monday - backed by Hitchin MP Bim Afolami - which saw the beleaguered leader win, albeit by a number far less than former premier Theresa May gained, before she was eventually ousted, the PM told his cabinet they had to draw a line and get on with helping people.
Yet, with the average cost of filling up a 55 litre car with petrol topping £100 for the first time ever - with the average household energy bill rising by 54 per cent over the last 12 months and expected to go up again this October - what can be done to ease the pressure?
In a speech on Thursday, Johnson insisted that no government can completely shield people from the global forces currently at play - which include the War in Ukraine and pressure on energy supplies. He did admit the price of goods such as oil, gas, grain and feed looks likely to remain high for the foreseeable future, but claimed, in time, these inflationary pressures would abate.
What we do know is that the PM believes that higher wages would risk further inflation - the erosion of the worth of the money in our pocket - so we can emphatically rule out a round of pay rises to combat the cost of living crisis. He underlining that by insisting an inflationary spiral will ensue if wages chase prices - while adding that the cure for this would be higher interest rates.
Johnson added that the overall burden of taxation on the economy is too high and must come down - but gave little in the way of detail.
So: Who is to blame?
The blame game has started in earnest, as people already struggling to cope with rising energy and food bills face soaring prices at the pump.
The PM hinted at another fuel duty cut, on the back of the 5p cut in fuel duty in March, but again gave little detail - while the government has accused some fuel retailers of profiteering and not passing on March's 5p cut in fuel duty.
For example, as we reported earlier: Why has the BP Garage on Bedford Road charged a whopping 17p more in petrol per litre than the BP Garage on Stevenage Road?
We spoke to BP who gave us the following answer.
"We aim to price fuels competitively and monitor the prices we set daily at the sites we operate.
"There are around 1,200 bp branded retail sites in the UK – BP owns and operates just over 300 of these. BP only sets the pump price at these retail sites we operate, and we aim to price competitively with other sites in the local area. We monitor our fuel prices daily on a site-by-site basis. Fuel prices take into account the local market conditions, cost of operations and the cost of delivering fuel to a particular retail site or area.
"In addition, taxes - duty and VAT - make up a significant proportion of price. Around 900 of the 1200 BP branded sites are operated by independent dealers to whom we supply fuel and branding. At those sites, the price is decided by the operator not BP."
BP concluded: "The Bedford Road station is operated by KVT Garages Limited. We do not set the prices at this site.
"The Stevenage Road station is owned and operated by us, we do set the prices at this site."
Hitchin Nub News is attempting to contact KVT Garages Limited for comment on why they think charging hard-pressed motorists an extra 17p more than another BP branded garage fewer than two miles away across our town is acceptable.
The price of oil has dropped from a highs of around $140 a barrel at the start of Russia's invasion to approximately $120, as nations started to seek supplies from alternative countries to Putin's Russia. Yet retail fuel prices have not dropped accordingly. Typically wholesale and retail prices move in tandem but refineries appear to be taking a bigger cut.
It is worth noting that retailers in general have blamed rising wholesale costs. It is also worth noting that oil refineries have been blamed for not passing on a fall in the price of crude oil since the highs during the early days of the war in Ukraine, with experts insisting that refineries are awash with cash and taking big margins.
However, that still does not explain the whopping 17p discrepancy between two BP branded garages a matter of miles apart. As Nub News reader Carole Parker-Milner said: "I am always amazed when I see motorists using this garage, given their prices."
While another Nub News reader, Mick Burr asked in disgust: "Why are prices rising?" However, Bob Dha added: "It's a free market, they can price as they like. The opposite of that would be price fixing if all local prices [were] the same."
Hitchin MP Bim Afolami has been contacted for comment on the situation
The Competition and Markets Authority are said to be investigating instances where cuts have not been passed onto the consumer. While there is no evidence that KVT Garages have done anything untoward, the government has said it has seen evidence that forecourts within the same retail chain are offering different prices in different areas - and could act.
While many in the fuel industry argue that wholesale prices have risen so sharply that the benefits of the Chancellor Rishi Sunak's fuel duty cut have been all but erased already.
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