It's all anyone is talking about recently.
With ridiculously long queues outside petrol stations, the fuel crisis is making what should be a simple task extremely difficult.
The key issue is the fact that there aren’t enough HGV drivers to supply the petrol itself, but oil companies have stressed that there is still plenty of fuel available.
But what about the cost of fuel? If you find yourself stuck in the queues and looking up at the numbers at the petrol station sign wondering why the price can be a certain amount in one place but 5p cheaper down the road then you're not alone.
So, what exactly impacts fuel prices? Well, it can be broken down into three factors.
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VAT
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Fuel duty owed to the government
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Combined wholesale cost, distribution cost and retail margin
The wholesale, distribution and retail margin is all about the costs involved in shipping the fuel, as well as storage and getting it to individual sites.
In terms of the margin (profit) on each litre, it's up to individual retailers based on the level of margin that they want to receive and the other factors listed above.
But where does oil come into all of this? Well, the fluctuation in the price of oil will also have an impact on the amount we pay, and so will changes in duty or VAT.
The general supply of new sources of oil, as well as world events, can have an effect but market forces play the biggest role in how much we pay.
Ever heard of Brent Crude? It’s a classification of oil extracted from the North Sea, and is a general benchmark as a reference price for buyers and sellers of all types of crude oil.
As we know, pump prices change on a daily basis, and currently, pump prices for fuel in the UK have reached their highest level in eight years as the stations run dry.
Reported by The Guardian , RAC figures show that the average price of a litre of petrol rose from 135.p last Friday to 136.p last Sunday (the highest since September 2013.)
Experian Catalist figures have also shown that average diesel prices rose from 138.0p a litre on Friday to 138.6p on Sunday.
The RAC Foundation released an updated breakdown yesterday of the latest average petrol and diesel pump prices and how it’s derived, the numbers are as follows:
Pump price (pence per litre) of:
Petrol - 136.4p
Diesel - 138.4p
Wholesale price (comprising oil production & refining)
Petrol - 42.2p
Diesel - 41.8p
Delivery and distribution
Petrol - 1.9p
Diesel - 2.2p
Retail margin (forecourt costs & profit)
Petrol - 11.69p
Diesel - 13.41p
Duty
Petrol - 57.95p
Diesel - 57.95p
VAT (Petrol 20%, Diesel 20%)
Petrol - 22.74p
Diesel - 23.07p
Percentage of the pump price that is duty & VAT
Petrol - 59.1%
Diesel - 58.5%
Is there a way to find cheaper fuel though? Well, motorists will definitely struggle at the moment, but there are plenty of apps and comparison websites to help you save some cash.
