Rising fuel prices could influence car market

The current boom in diesel car sales could slow down, as the average price of diesel fuel at the end of June reached 132.27p per litre - 22.5 per cent higher than it was at the beginning of the year, according to figures from Experian, the global information services company.

The figures provided by Catalist, an Experian company, show the biggest increase in diesel fuel prices for the first six months of any year in the last decade.

The average price of petrol has also increased significantly to 118.9p per litre - 15.4 per cent higher at the end of June compared to the beginning of the year.

Furthermore, while both diesel and petrol prices have been rising, diesel prices have crept up at a faster rate over the last six months. There is now an 11.2 per cent difference between petrol and diesel prices, compared to a 4.8 per cent difference in January 2008.

Kirk Fletcher, Managing Director of Experian's Automotive division, said: "Sales of used diesel cars have continued to remain strong over the last few years and the threat of higher tax on the most polluting cars, plus the rising costs of running a car have played a part in the shift in car buying habits.

"As fuel prices continue to rise, it will be interesting to see how buying habits adapt this year. The sharp increase in petrol prices corresponds with a marked decline in sales of petrol run cars. On the other hand, sales of diesel used cars rose by 10.1 per cent during the first three months of 2008. However, if diesel fuel prices continue to rise at this rate, we may see a slow down in the sale of diesel cars and a bigger shift over to cars that are running on alternative fuel. We are already seeing a rapid increase in the sale of hybrid cars, which were up by 93 per cent during the first quarter of 2008 compared to the same period in 2007, and electric cars which increased by 415 per cent."