Yahoo Finance Fuel Sales Slump Hurts Treasury In Recession
Plunging sales of fuel this spring even as pump prices dropped by 10p a litre is further proof that the market is failing, according to the AA.
It spoke out after official figures showed a 10.6% drop in sales, with almost 500 million fewer litres of petrol sold between April and June compared with the same period last year.
The figures, released by the Department of Energy (NYSEArca: JJE - news) and Climate Change, followed a near-120 million litre rise in petrol sales in the first three months when the tanker drivers' dispute led to some panic buying.
Edmund King, the AA's president, said: "Ever-increasing prices in recent years have sent petrol sales into steady decline and the panic-buying at the end of March may have brought forward sales in early April. Wet weather may also have played a part.
"However, petrol prices slumped more than 10p a litre, from the record of 142.48p a litre in mid April to the low-point of 131.19p at the end of June, and UK drivers began to travel further with lighter evenings, bank holidays and the Queen's diamond jubilee celebrations."
Mr King continued: "A fall of 2.27 billion litres in UK fuel sales over the first six months of this year compared to the same period in 2008 has got to bring some sense of reality to the fuel market and the Government."
He accused the fuel industry of trying to squeeze more money out of shrinking customer demand, pointing out that drivers and businesses had to pay 5p a litre more for diesel at a time in the early spring when wholesale costs were cheaper than petrol.
Mr King said: "Price transparency is the way forward: to ensure and show drivers that they are getting a fair deal at the pump."
Between June 2007 and June 2012, petrol prices have risen by 38% and diesel prices increased by 43%.
In September, the Office of Fair Trading announced an investigation into fuel pricing, to check whether falls in oil costs were being matched by falling pump prices.
The fall in sales is bad news for the Chancellor George Osborne as it means less taxpayer revenue from fuel duty as the Treasury's income suffers amid a weaker than expected economy.
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