Fuel costs decrease but sector suffers 'uncertainty'

09-Aug-2022 - Last updated on 09-Aug-2022 at 14:58 GMT

Fuel costs begin to decrease: sector still suffering from uncertainty (Credit: Getty: Image Source)

Related tags Finance NTIA Barclaycard

Fuel prices have begun to slowly decrease, potentially lessening the strain on supply chains, but businesses are still suffering “uncertainty” as consumers continue to grapple with the cost-of-living squeeze.

Analysis of RAC Fuel Watch data showed the price of petrol fell in July by 8.74p to 182.69p a litre while diesel came down by 6.69p a litre from 199.07p at the start of the month to 192.38p by the close.

However, industry leaders stated it was “excruciating” to see the sector’s continued suffering amid the uncertainty around fuel costs.

Night-Time Industries Association (NTIA) CEO Michael Kill said: "We have heard about record profits from fuel companies in the press for the past few weeks while fuel prices slowly decreased to where they should have been months ago.

Further uncertainty

“It's excruciating to watch as businesses suffer with further uncertainty.”

While these were the third and fourth biggest monthly reductions respectively in the last 20 years, the RAC said the fall in the wholesale price of fuel is not being fairly reflected.

Furthermore, the RAC estimated, on average, the cost of filling up a tank of unleaded petrol was costing £9 more than it should.

This comes as research from Barclaycard earlier this week found the cost-of-living crisis had already caused 29% of Brits to look at spending less on days out, with 55% of this group planning to reduce spending in the on-trade.

Knock-on effect

Barclaycard head of consumer products José Carvalho said: “Inflation continues to have a noticeable impact with price rises forcing shoppers to spend more on essential everyday items such as butter and milk and to cut back on some discretionary experiences such as meals and drinks out.”

Additionally, June saw operators express fear the impact rocketing fuel costs, previously attributed to Russia’s invasion of Ukraine, would have on existing supply chain issues.

The Bath Pub Company managing director Joe Cussens said: “The main impact will be the knock-on effect on prices charged by our suppliers.

“If the cost of production and transport of their goods goes up due to higher diesel costs, then it’s likely they’ll pass this on to us. We’ve increased our prices already and will no doubt do so again in the future.”