The Price of Diesel Expected to Soar

Jan 28 2012

Every year many thousands of Britons sign up for car finance deals on diesel vehicles.  Their most important consideration is often the superior fuel economy of these cars.

Unfortunately, we have bad news for them today: the price of diesel is expected to skyrocket after Britain’s biggest independent oil refinery went into administration a few days ago.

The Coryton refinery is located in Essex.  It supplies roughly 20% of all the fuel used in the south-eastern part of England.  Deliveries have now come to a complete standstill after the Swiss-based parent company, Petroplus, announced that it was insolvent.

The price of diesel at the pump is already 142.21 pence/litre, which is only 1 pence/litre less than the record of 143.04 we saw in May 2011.  Energy analysts and motoring groups are afraid that the Coryton shutdown will cause diesel prices to soar.

A spokesperson for the AA said that they expected the diesel price to exceed the previous record high.

Damien Cox, lead analyst at energy broker Energy Quote, said “In the short term this will have an impact.  There could be some price increases.”

Cox, however, was unhappy with certain newspaper reports that speculated about possible fuel shortages.

He said that it was important to see the matter in perspective.  Although the closure of the Coryton refinery will have a short-term impact on the supply of diesel, there were contingency plans in place and in the long run supply will return to normal.

He also pointed out that the British economy was shrinking, with a corresponding decline in demand for diesel.

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