Shock horror – diesel prices at an all time high!

Diesel at £143 per litre, a record high! Relax. Diesel cars are so efficient. Many diesel family cars able to duck under the free road fund licence limit. Petrol car sales are levelling out. This is a bit of a nuisance for oil refining companies since diesel does not need so much refining compared to petrol. Expect an oil refinery or two to go bust later in the year. Clearly this surplus of petrol will reduce its price relative to diesel. Heating oil is similar to diesel and with the recent severe winter experienced in much of the northern hemisphere, there has been a recent drain on heavy oil supplies. Iran cutting off oil deliveries to Europe did not help either.

Consider this – if supplies and consumption were absolutely constant, the cost of diesel would rise monthly in line with inflation. What goes up must go up..