The facts:

• The UK has virtually the cheapest pre-tax fuel but the most expensive post-tax fuel in the EU
• Global demand for oil is rising due to unprecedented economic expansion in India, China and US economic recovery. Prices are not expected to fall in the short term
• Operating with lower crude stocks leaves oil companies with less of a cushion when supply is interrupted. Examples of this include the US, the Middle East and Nigeria
• The policies of the Organisation of the Petroleum Exporting Countries (OPEC) are now more aggressive with pre-emptive production cuts and reducing stock building during seasonal dips. Data error may also lead to demand forecasts being too low
• Hedge funds and other speculators betting on higher prices when stocks and supplies are low have added to price pressure
• Conflict and the threat of violence in the Middle East, including attacks on oil supply and foreign workers in Iraq and Saudi Arabia also contribute to higher prices
• Every year motorists pay £42bn. in motoring taxes (£32bn. in fuel duty), of which only £6bn. is spent on road improvements

RAC position:

• Overall the cost of motoring has diminished, but the average annual cost of motoring is now more than £5,000 according to the latest RAC figures. More than £1,000 of this goes on fuel
• Many motorists, particularly those in rural areas do not have an alternative form of transport
• RAC called for and welcomed the continuation of the freeze in fuel duty

What can motorists do?

• Shop around for fuel. Driving a short distance to the next garage can save several pence on fuel. Often supermarket filling stations offer the best prices
• Drive smoothly. Avoid the routine of accelerating hard and breaking harshly. It has been estimated that those who drive smoothly and intelligently can save a staggering 30% of fuel consumption compared with those with a heavy right foot
• Drive more smoothly and think ahead. Applying light throttle and avoiding heavy braking will reduce overall fuel use and reduce wear and tear on the vehicle. Driving techniques can influence fuel efficiency by as much as 30%
• Switch engines off, when safe to do so, and especially when stuck in traffic for more than a few minutes. Not using air conditioning will reduce fuel consumption and ultimately save money
• Once you start your car, drive off as soon as possible. Don't leave engines running once started up. Instead drive gently until the engine has reached its normal operating temperature
• Lighten the load. Remove heavy unnecessary items for journeys such as roof racks. The lighter the load, the lower the fuel consumption
• Ensure that the tyres are inflated to the correct pressure – you can find the required pressure in your owner’s manual. According to figures provided by the RAC under inflated tyres increase resistance and can increase fuel consumption by up to 2%

For further information contact:

RAC Press office
Jon Day

Telephone: 01603 681914
jon.day@aviva.co.uk

Updated October 2007

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