UK road fuel sales in December slip on year despite lower prices

UK road fuel sales fell seasonally in December to average slightly below year-earlier levels, according to official data, despite a continued slide in pump prices after record summer highs.

Great Britain's fuel sales averaged 14,741 liters per filling station in December, down 7% from November levels and 1% lower than the year-earlier average, according to the UK's Department for Business, Energy and Industrial Strategy.

While the December data reflects lower holiday season demand for Christmas and the New Year, the data shows Britain's average 2022 road fuel sales were 2.6% higher than in 2021. Compared to the UK's pre-lockdown average fuel sales of 17,766 liters per station in early 2020, however, last year's fuel sales were 13% lower despite returning close to pre-COVID levels in late May 2021.

Britain's road fuel sales have been largely in structural decline after peaking more than a decade ago. The UK's fuel consumption in the transport sector has mostly fallen since 2007 and had contracted on average by around 0.7% per year in the three years to 2019, according to historical BEIS data.

UK gasoline prices soared to record highs of GBP1.91/liter ($2.32/liter) on July 1 on the back of Russia's war in Ukraine, low regional stocks, and a lack of global refining capacity, triggering concerns over demand destruction for a key component of the refined crude barrel.

Average UK pump prices have fallen sharply since then, with average gasoline prices at the pumps around GBP151/liter on Dec. 30, according to automotive services company RAC.

In October, the Office for National Statistics cited public opinion data which found that, of the 91% of adults who said their cost of living had increased, 41% were cutting back on non-essential journeys in private vehicles.

S&P Global Commodity Insights estimates that the UK's gasoline and diesel/gasoil demand will average of 244,000 b/d and 563,360 b/d, respectively, in 2022, compared with 272,260 b/d and 625,750 b/d in 2019. Overall, the UK's oil demand is expected to average 1.35 million b/d this year, up from 1.26 million b/d in 2021.