Pumping up the petrol price is bringing pain to everyone - Sarah Coles

According to the AA, last Sunday petrol hit 148.2p a litre and diesel 151.57p a litre, and this is unlikely to be the worst of it.

A big chunk of the price at the pumps is driven by wholesale prices, which soared at the end of last week as Russia and Ukraine seemed on the verge of war.

The welcome de-escalation means oil prices have backed off since.

However, the underlying problem of booming demand and restricted supply hasn’t gone anywhere.

Opec + is still increasing production far more slowly than the world is using it, and even slower than it said it would.

It means we’re going to see higher wholesale prices feed through into prices at the pumps for the rest of 2022 at least.

Inflation figures for January were released on Wednesday, and showed that petrol prices have risen 24.4 per cent in a year and diesel prices 22.9 per cent – it’s one of the most dramatic price surges tracked in the monthly figures.

The Government could do something about this, because it’s responsible for the lion’s share of the cost of filling up the car: 40 per cent of the overall cost is fuel duty and 17 per cent is VAT.

However, aside from announcing another fuel duty freeze – which has become something of an annual tradition – it’s highly unlikely to step in to protect motorists.

If it’s not planning to cut tax on energy, so more people can afford to eat and heat their homes, it’s hardly likely to spare motorists either.

It could also argue that taxing a fossil fuel is helping support the path to net zero.

Retailers could also take a smaller slice of the pie, but they have already cut back their profits significantly.

They were taking larger margins than usual in December and January – arguing that they needed to make up for the fact people bought less petrol during the pandemic.

However, they’re back to adding around 7p a litre in profit, which is more typical.

As a result, it’s up to us to find a way to manage the extra cost. For many people this means using the car less, and a survey by the AA found that a huge 43 per cent of drivers had already taken this step – rising to 53 per cent among lower earners.

Lifestyle changes like this are effective, but can be incredibly difficult, as we get used to taking fewer trips and using alternative transport.

Hybrid working has been a brilliant short cut, cutting out the commute for at least some of the week.

In late January, just over a third of adults (36 per cent) worked from home at least one day a week, and 50 per cent of people said they spent less on fuel and parking.

However, as more people return to the office and more employers insist on it, this money-saving option is going to be closed down, and if we can’t find another way to do the journey, we’ll need to explore other options.

You can make a big difference to fuel efficiency with a few steps.

This starts with maintenance, like ensuring your car is serviced regularly and that your tyres are properly inflated.

You should also remove roof bars and boxes when you don’t need them, to cut down on air resistance, and take heavy loads out of the boot.

Driving styles make a big difference too. Driving more slowly, in the highest appropriate gear and accelerating more gently are great ways to improve your fuel consumption.

It can also be useful to get into the habit of anticipating what’s about to happen, so you can ease off the accelerator plenty of time in advance and stay off the brakes.

When you do need to brake, stay in gear because this means the fuel cut-off in a fuel injection engine is activated, so you don’t use fuel while braking.

If you can’t cut back on journeys, you can combine them, because a warm engine is more efficient than a cold one, so planning ahead and combining trips can help keep fuel consumption down.

And once you have done all of this, if rising costs are still putting you under pressure, you may need to cut costs elsewhere.

The AA found, for example, that one in ten drivers of working age were spending less on the weekly food shop.

After two years of the pandemic, and months of rising prices, it’s getting harder to find costs we can sensibly cut. And yet, more price pressures mean we’re having to push the envelope.

In my local supermarket, I used to be among a rare few people timing my shop specifically for the yellow sticker reductions, and now there’s a growing pack of us.

There’s every chance that if they introduced a cost-cutting challenge to the winter Olympics, Team GB could finally field a world-beating team.

This week, NS&I has doubled the rate on its Green Savings Bonds to 1.3 per cent.

It’s a dramatic step born out of the fact the first issue, with its miserable rate of just 0.65 per cent over three years, was a bit of a damp squib.

These bonds are specifically designed to raise funds for particular green projects, so falling short of the fundraising target would have put a spanner in the works.

They had to do something pretty dramatic to turn these bonds around, and doubling the rate may well be enough.

The rate still leaves the bonds a long way short of the best on the market.

You can currently get up to 1.86 per cent over three years. However, NS&I may have done enough.

It’s likely to win over a good chunk of savers who want to do the right thing with their money, in an account 100 per cent protected by the Treasury, and with a brand they know and trust – without taking a massive hit to their interest rate.