Fuel sales drop by one billion litres

Motorists have reacted to soaring fuel prices at the pumps by slashing the amount of petrol and diesel they buy.

Data from the Automobile Association (AA) has shown that drivers bought a billion less litres of fuel in the first 12 weeks of 2011 compared with the same period in pre-recession 2008.

The slump is estimated to have cost the treasury almost £650 million in lost revenue and is likely to kill off any chances of a cut in fuel duty.

The fall in demand for petrol represents a 15.2% dip since early 2008, while diesel sales are off by 6% over the same period. Year-on-year, the amount UK drivers spent on petrol was down by 3.7%.

Petrol prices increased by nearly 8p a litre in the first three months of this year alone, with diesel rising by more than 10.5p since January. Last month, a litre of unleaded petrol cost a record high of 136.1p. Diesel was up to 139.9p, while super unleaded stood at 143.4p per litre.

The AA figures were released as the wholesale price of North Sea Brent blend leapt by $3 a barrel on expectations of stronger global demand due to the strengthening US economy.

Some 76% of AA members said they were cutting back on the amount they spent on fuel or spending less in other areas to compensate for rising prices. This compares to the 63% who said the same over the Christmas period.

Edmund King, the AA’s president, said: “The full impact of higher VAT, unbridled stock market speculation and a weaker pound on fuel prices and drivers’ ability to afford them have been laid bare.

“The first three months of this year saw the equivalent of 13.5 days of UK petrol sales wiped out – good for the environment but appalling for families, business, rural communities and the Treasury.”

“Our study shows the real impact of record pump prices. Petrol and diesel prices continued to set new records up until the second week of May, adding a further 4.3p a litre to the cost of petrol and 3.3p to diesel.

Peter Carroll, from campaign group FairFuelUK, said: “This is proof that the higher fuel prices and duty are, the more people will just stop buying it and so the less money the Treasury will make.”