The recent fall in sterling, exacerbated by Friday’s scary mini-budget, has hit hard-pressed motorists in the pocket, the car industry said. The AA said pump price savings from oil costs falling back to where they were before Russia’s invasion of Ukraine were being “severely undermined” as sterling has fallen to 37-year lows. It calculated that if the pound had held its value in mid-February at around $1.35, rather than Friday’s $1.11, petrol pump prices would have been at least 11p a liter cheaper, or £6.05 for a 55 liter tank. Britons have been squeezed by record fuel prices this year as Russia’s invasion of Ukraine pushed the price of oil higher, fueling the pumps. However, the strength of the dollar against the pound also contributed to the rise. AA fuel prices spokesman Luke Bosdet said: “The influence of the exchange rate is often overlooked when drivers compare oil price movements with those at the pump. Right now it’s critical. Oil and fuel in commodity markets are traded in dollars, making the weak pound very bad news for motorists. “The price of oil has returned to the level of the start of the war in Ukraine, but gasoline is more expensive. Two-thirds of this higher cost is due to the weakness of the pound.” Gasoline averaged 164.8 p.m. per liter at the beginning of the week, from 173.5 p.m. in mid-August. But the drop of 8.7 am. is less dramatic than the 15 p.m. decrease. between mid-July and mid-August. The average price of diesel fell by 12.5 p.m. between mid-July and mid-August, before falling another 3 A.M. at 181.3 am at the beginning of the week. Bosdet advised drivers to shop around for fuel, claiming they could find it for around 10p per liter below average prices in a “competitive forecourt”. The pound lost further ground against the dollar after the AA did its analysis, falling below $1.09 for the first time since 1985. Earlier this year, the government asked the Competition and Markets Authority (CMA) to carry out a “short and focused” review of the fuel sector amid allegations that petrol retailers were profiteering. The competition watchdog has since launched an in-depth investigation into the fuel sector after raising concerns about refiners’ profit margins. In July, the CMA recommended that the government consider measures to make it easier for drivers to compare fuel prices at different forecourts to increase competition. Separately on Friday, activists expressed disappointment that Chancellor Kwasi Kwarteng did not cut fuel tax in his mini-budget. FairFuelUK’s Howard Cox said: “Low income families, small businesses and the economy will continue to be crippled by high pump prices, punitive levels of fuel duty and opportunistic speculation in the fuel supply chain. Neither has been addressed by this ongoing informal Tory administration.” Kwarteng said he was “happy to work” with MPs on calls for a fuel tax cut.
