UK Fuel Price Surge: How Rising Costs Impact the Taxi Industry

The UK has seen a continuous rise in petrol and diesel prices for five months, with costs reaching their highest levels since September 2024. According to RAC Fuel Watch, a litre of petrol rose by 0.65p in February to 139.65p, while diesel increased by 0.73p to 146.48p. This rise has significantly impacted taxi drivers, who rely on fuel for their daily operations.

A full petrol tank now costs £76.81, nearly £3 more than in October, while diesel tanks exceed £80, an increase of over £4. For taxi operators, these rising costs translate to reduced profits and higher fares, affecting both drivers and passengers.

"It’s disappointing to see pump prices up yet again in February, with drivers now facing some of the highest costs at forecourts since the end of last summer,"
RAC fuel spokesperson Simon Williams stated.
"Motorists were the unfortunate casualties of rising wholesale prices through January, not helped by global oil prices hitting the $82-a-barrel mark in the middle of the month."

Rising Costs and Regional Variations

Supermarkets are selling fuel below the national average, with unleaded at 137.36p per litre and diesel at 143.91p. Some independent fuel stations offer even lower prices, with one in Shropshire pricing petrol at 126.9p and diesel at 135.9p. However, taxi drivers in major cities still face high fuel costs due to demand and location-based pricing.

Northern Ireland continues to have the cheapest fuel, with petrol averaging 132.9p per litre and diesel at 138.9p—around 6-7p lower than mainland UK. Taxi operators in these regions benefit from reduced fuel expenses compared to their counterparts in high-cost areas like London.

Prospects for Price Reduction

The recent surge in fuel prices is linked to rising wholesale costs driven by an increase in global oil prices, which peaked at $82 per barrel in mid-January. Additionally, heightened fuel demand due to winter conditions and market uncertainty around the US presidency contributed to the price hike.

However, there is hope for relief. Oil prices have been falling in recent weeks, suggesting that fuel costs could decrease soon. Simon Williams emphasized the importance of price monitoring, stating that as retailers buy fresh stock at lower prices, reductions at the pump should follow.

"But we hope better times are on the horizon. With wholesale fuel costs falling throughout February, there’s a good prospect petrol and diesel prices will come down this month as retailers buy fresh stock at lower prices,"
Williams added.
"As always, it really does pay to shop around because pump prices at supermarket sites vary by as much as 13p a litre."

For taxi drivers, even a small reduction in fuel costs can make a significant difference in earnings, making price comparisons essential.