Soaring prices force drivers to cut petrol use by 15%

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Cash-strapped drivers have reduced their petrol consumption by more than 15% since the credit crunch started three years ago.

Government figures show that 1.7 billion fewer litres of petrol and diesel were sold in the UK between January and June than in the first half of 2008.

The AA says the huge drop in sales, due in part to record fuel prices in May (petrol 137.43p a litre, diesel 143.04), has deprived the Treasury of £985 million in fuel duty over the half year.

Another, more positive result is that the fall in petrol consumption saved 3.95 million tonnes of CO2 – equivalent to the amount absorbed by nearly 0.5% of the UK's broadleaf trees over their lifetime.

AA/Populus surveys of the impact of high fuel prices on AA members show that, in April 2008, 64% of them were cutting back on car use, other non-fuel spending or both. This May, that figure had climbed to 76%.

Businesses have been cutting back as well.

Between January and June this year, petrol prices averaged 133.13p a litre, up 16.45p (116.68) on the same period in 2010 and 24.13p (109) higher than in 2008.

Diesel sales in the first half of 2011 remained more resilient, down 31.2 million litres (-0.4%) compared to the six months of 2008. However, commercial diesel sales during the first six months have fallen 2.1% compared to the same period last year and are down 3.2% on 2008 levels.

Supermarkets have coped better with record pump prices, with petrol sales up 0.4% and diesel up 11.8% from April to June. Other retailers have seen petrol sales fall 11.2% but diesel volumes rise 2.0%.

The Co-op's introduction of a fuel voucher offering a 5p saving on fuel from a £30 spend in store shook up other fuel voucher offerings that tended to rely on a 5p saving from a £50 spend. Alongside Asda's significantly lower pump price policy, a fuel voucher war may have paid off for the supermarkets.

"There is no downplaying the impact of record fuel prices on family's and other people's lives. A 1.7-billion-litre drop in petrol sales says just one thing – too many car owners cannot afford these record prices and are losing mobility as a consequence," says Edmund King, the AA's president.

"With petrol and diesel costing around 20p a litre more than a year ago, the Treasury faces an even bigger black hole opening up in its fuel duty receipts if the 3.02p-a-litre increase in fuel duty goes ahead next January. Oil and pump prices may be falling at the moment, but a return of confidence in the stock market will be reflected in yet another hike in commodity prices, as has been the case throughout this summer."
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