UK PRE-TAX  PETROL AND DIESEL PRICES CONFIRMED AS THE LOWEST AMONGST MAJOR EU COUNTRIES IN 2004

Survey data of 11 major EU countries shows that the UK continued to have the cheapest pre-tax petrol and diesel pump prices in 2004, despite a background of volatile crude oil and product markets.

Data from Wood Mackenzie , one of Europe's leading energy information companies specialising in downstream oil markets, was based on its Opal service that monitors  major brand pump prices across 11 EU member countries. It revealed that the UK average pre-tax pump price of unleaded 95 petrol was 21.6 pence per litre, 0.6 pence and 1.1 pence per litre cheaper than the next lowest countries Germany and France.

The UK was also the cheapest pre-tax for diesel, averaging 22.84 ppl, compared with 23.3 ppl in Germany and 23.9 ppl in Spain.

Competitive
Chris Hunt, Director General of UKPIA, commented “This survey underlines just how competitive fuel retailing continues to be in the UK, pre-tax pump prices having been consistently amongst the lowest in the EU over the last eight years. We also have a good refining and supply infrastructure in the UK and despite testing market conditions, our members have been investing at their refineries to prepare for the move to sulphur-free fuels. Combined with new vehicle technologies, these new fuels will help improve fuel efficiency and deliver further improvements in exhaust emissions”.

Tough conditions
Competition in fuel retailing is also reflected in the level of gross margin on each litre of petrol sold – the difference between the selling price of petrol and the open market cost.  Wood Mackenzie’s Opal figures show that this averaged just over 5 pence per litre in 2004. The gross margin is not just the profit available to a retailer but also represents the sum available to cover costs such as transporting fuel from a refinery, marketing and promotion, and operating a filling station.

These tough conditions have contributed to the continued closure of filling stations in both urban and rural areas of the UK, whose number has declined from over 18,500 in 1992 to 10,500 in 2003.(Source: Energy Institute UK Retail  Marketing Survey 2004)