Petrol sales fall 20pc as drivers feel the pinch

By Ambrose Evans-Pritchard and Robert Winnett 

British motorists are shunning their cars following record rises in the price of fuel, the International Energy Agency said on Tuesday.

The IEA, a widely respected body, said that “British motorists are clearly driving less” following a doubling in crude oil prices over the past year.

	The drop in demand for petrol among British drivers is greater than that being experienced in other countries

Petrol retailers have disclosed that fuel sales dropped sharply over the past few weeks and the latest figures appear to show that demand for petrol in Britain has slumped by as much as 20 per cent over the past 12 months.

According to the IEA, a part of the Organisation for Economic Co-operation and Development, motorists are instead choosing to take public transport as their cars become too expensive to run.

Speaking to The Daily Telegraph on Tuesday, Eduardo Lopez, the IEA’s chief oil analyst, said: “British motorists are clearly driving less. “They are switching to public transport, which is much easier to do in Britain than in America, where people living in the suburbs often have to drive whether or not they want to.”

The analysis provides some of the first hard evidence that motorists are realising that they have to change their behaviour in response to the sharp rise in petrol prices.

The drop in demand for petrol among British drivers is greater than that being experienced in other countries. The analysis backs up evidence collected from surveys of motorists conducted by the AA, which indicate that most people are now attempting to cut back.

Luke Bosdet, an AA spokesman, said drivers had become much more conscious of cost. “We may be turning the clocks back to the 1970s when working people couldn’t afford to drive any more,” he said.

The cost of a litre of petrol has increased rapidly from 92.8p in March 2007 to 106.8p in March 2008 and to almost 117p today.

The rise has followed a doubling in the price of crude oil. Last Friday, oil registered its biggest ever one-day increase amid growing panic on the international financial markets.

The cost of filling up the average family car is now in excess of £60 and it can take almost £80 to fill the tank of many popular models.

The IEA figures came as new research showed that British motorists have suffered from a much higher rise in petrol prices than their European neighbours.

The cost of unleaded petrol has risen by 20 per cent in Britain over the past year, a far greater increase than across the Continent, where prices have risen by 14 per cent.

In Italy and Germany prices rose less than 10 per cent, according to Post Office Travel Services research.

Ray Holloway, from the Petrol Retailers Association, said that there had been a sharp fall in fuel sales over the past three weeks, especially in the north of England.

However, he said he was surprised by the drop in demand reported by the IEA. “We don’t see evidence that it has fallen off a cliff,” he said Gordon Brown is under increasing pressure to intervene in the growing fuel crisis and to help motorists.

In Britain and throughout much of Europe, fuel protests have been triggered by the sharp rise in petrol prices and governments are struggling to deal with the consequences of the boom in the oil market.

At the same time, however, the British Government is actually trying to increase motoring taxes.

Last month, The Daily Telegraph launched a campaign calling on the Government to scrap a proposed 2p increase in fuel duty this autumn.

The campaign also demands that ministers abandon plans for a big increase in road tax for millions of older vehicles. Fears are growing that oil may continue to rise steeply in the coming months.

On Tuesday, Gazprom, the leading Russian oil company, predicted that the price of a barrel of oil could almost double to $250 (£125) over the next year.

Many American banks are also forecasting a “super-spike” in the price of oil to between $150 and $200 before the end of the year.

The trade unions are lobbying ministers to impose a windfall tax on the leading oil companies. This has also been proposed by Barack Obama, the American Democratic presidential candidate.

Motorists face further misery this weekend after it was confirmed that a tanker strike would go ahead. The action – over a pay claim – is expected to lead to deliveries to Shell petrol stations being disrupted and could produce fuel shortages since one in 10 forecourts could be involved.

However, a spokesman for the Prime Minister urged motorists not to panic and to continue to buy petrol “as normal”.

A UK Petroleum Industry Association spokesman said: “We are worried that motorists will descend on filling stations needlessly.

“People should only fill up when they need to. In Scotland, the experience of Grangemouth showed that there were real problems when motorists did not keep calm.

“Filling stations had trouble keeping up with demand while motorists were driving with full tanks of petrol, which was more than they really needed.”