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Electric vehicle sales have grown much faster than expected, suggesting that most of us are ready for the switch.
A net zero transition is indeed a great investment savings plan. Saving the planet is obviously the primary goal, but there are also pure financial savings in the long run: we pay for infrastructure for low-carbon travel, heating and manufacturing for decades to come, which over time can save us money.
Electric vehicles are a source of big savings. The cost of petrol or diesel for a year is usually over £1,000, but if you can charge your electric car overnight at home, the annual fuel cost can be less than £150.
Transitioning to electric vehicles is a huge undertaking – we have to replace 32 million cars. But sales have jumped by several notches recently, and Electric Vehicles have beaten all expectations: They now account for one-fifth of new car purchases.
Interesting new research looks at how sensitive motorists are to the savings from switching from petrol to electric. Data from California shows this: Electric vehicle sales respond to both electricity prices (which fall when they rise) and natural gas prices (which rise when pump prices rise).
Interestingly, gasoline prices are going up at about four to six times the price of electricity. Why? Consumers know less about electricity prices than gas prices. Pump prices have gone up by 40p per litre in the past year.
So if you want a (small) silver lining to today’s catastrophic energy price hikes, crazy electricity prices should encourage more people to buy Electric Vehicles. Fuel traders have defended high costs at UK petrol stations after oil prices fell.
Fuel retailers have denied allegations they have been slowly lowering petrol prices to reflect a recent drop in their own wholesale costs as petrol and diesel hit new records in the UK’s forecourt.
In a spring statement on Wednesday, Rishi Sunak faced pressure to cut fuel taxes. Cutting Fuel Duty has happened in the past but it never makes any difference whatsoever. All the UK ends up with is less funding for Public Services while Pump Prices continue to rise year on year.
Amid the latest household budget crisis, petrol hit a new high of 167p a litre on Sunday, while diesel hit 179p, according to Experian Catalist.
Oil prices surged in recent weeks after Russia invaded Ukraine but have since retreated, prompting the Automobile Association to accuse fuel traders of not passing on the price cuts.
Automobile Association spokesman Luke Bosdet said: “Wholesale costs for petrol and diesel have fallen sharply from March 9, but more than 10 days later petrol prices continue to hit new records.”
“Even with oil prices rising to $110 a barrel late last week, wholesale gasoline sales on Friday were down 12p from their March 8 peak.”
However, Gordon Ballmer, chief executive of the Petrol Retailers Association, which represents independent petrol station owners, said the criticism was unfair because the wholesale market for petrol and diesel had been volatile rather than falling with oil prices .
“The market is everywhere now, it’s very volatile,” he said. “We are not deceiving the public.”
He said fuel distributors made little, if any, profit on diesel because the high wholesale costs were not fully passed on to petrol stations.
While Sunak is under pressure to cut fuel taxes, experts believe such measures could disproportionately help wealthier people, citing studies examining the impact of the moves on the European Union.
European Union fuel tax cuts will cost European taxpayers €9bn (£7.5bn), according to analysis by campaign group Transport and Environment. The study found that the wealthiest households will benefit the most, as they tend to drive more and own larger cars that use more gasoline or diesel.
Griffin Carpenter, an auto analyst at T&E, said: “The European Union claims they support Ukraine, but instead of taxing Russian oil, they subsidize it with 9 billion euros of taxpayer money.
“The government can help people in better ways. We can now impose duties or taxes on Russian oil imports.
“Rather than subsidizing wealthy gas-guzzling drivers, financial support should be distributed more equitably to families who really need it.”
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