2022 has been a tough year for motorists with the skyrocketing cost of fuel along with everything else getting more expensive. Fuel prices have been on the rise this year reaching a peak of almost £2 a litre on average, which has put a great strain on many people’s finances at a time when many households are already feeling the squeeze as a result of the cost of living crisis and energy crisis, both of which are predicted to get worse in the winter months.
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Why Prices Have Been Rising
The increase in the cost of crude oil rising following the pandemic with suppliers struggling to keep up with demand, plus the war in Ukraine has had an effect with the world looking to alternative producers from Russia. The UK only imports 6% of its crude oil from Russia, but prices at home are still affected when the global cost increase. As a result, the cost of fuel has been rising sharply in 2022 and reaching record levels with demand so high and supply issues. Now, it seems that prices are finally plateauing and even coming down in places.
What Has Caused the Plateau?
So, why has the cost of fuel in the UK seemingly plateaued? This is as a result of weakening demand that is being seen both globally and domestically due to the economic instability and concerns over the looming recession. It is said that the “war premium has evaporated” and now demand for fuel is falling with people worried about their finances in the near future. The worrying economic outlook is forcing people to make changes to their lifestyle and many will be looking to drive much less in the coming months as a way to save money. Alternatively, motorists can look to fuel-efficient cars, such as used DS automobiles cars for sale that could help them to make savings.
The Future of Fuel Prices
With so much uncertainty both globally and domestically right now, it is very hard to predict what the future of fuel prices will be. While costs have plateaued and even fallen in some places, experts predict that prices will remain high in 2023. With the situation in Ukraine waging on and with no resolution in sight anytime soon, disruption will continue as other suppliers struggle to keep up with demand. There is a glimmer of hope for the second half of 2023, though, as there are several new refineries starting up, including ones in the Middle East, Nigeria and China.
It is a relief to see that the cost of fuel seems to have finally plateaued in the UK and even come down in some places. Despite this cooling in the cost of fuel, it is likely to remain high well into 2023 and this will cause difficulty for many households with the cost of living crisis and energy crisis a major concern for the winter months.
