Fuel Sales Slump Over High Prices At Pumps

Fuel sales slumped in the first three months of the year compared with the same pre-credit crunch period in 2008 due to rising fuel costs, the AA has said.

Motorists bought one billion fewer litres of petrol and diesel during the period from January to March, research by the motoring organisation found.

The drop saw the equivalent of 13.5 days of UK petrol sales wiped out.

Service stations across the country sold 835 million fewer litres of petrol and 247 million fewer litres of diesel, compared with January to March 2008.

Record fuel prices saw petrol increase by 7.94p a litre, and diesel go up by 10.51p a litre.

As a result, petrol sales dropped by 15.2% and diesel by 6%.

The sharp decline in sales deprived the Treasury of more than £637m in tax during the first three months of 2011.

Chancellor George Osborne cut 1p from fuel prices in the Budget in March, which was effectively swallowed up overnight by rising oil costs.

AA president Edmund King said: "The full impact of higher VAT, unbridled stock market speculation and a weaker pound on fuel prices and drivers' ability to afford them have been laid bare.

"However, supermarkets have launched a sustained campaign of fuel-related promotions and, combined with a loss of appetite among oil market speculators leading to falling oil prices, the next quarter's figures will be significant."

Petrol and diesel prices continued to set new records up until the second week of May, adding a further 4.3p a litre to the cost of petrol and 3.3p to diesel.