Happy holiday motoring as fuel prices dive

Fast on the heels of sterling’s recent rally against the euro comes more good news for UK holidaymakers motoring to Europe this summer. Fuel prices have plummeted across Europe - falling by up to 12 per cent for unleaded petrol and as much as 31 per cent for diesel, according to Post Office Travel Services’ Motoring on the Continent report.

Although Switzerland again proved cheapest for unleaded petrol at 91p per litre, Austria and Spain are better value overall because motorists visiting these eurozone countries can expect to pay just 1p more for unleaded petrol but much less for diesel. Unleaded petrol in all three countries now costs around 34 per cent less than in the Netherlands, the most expensive of 12 destinations surveyed by the Post Office.

The report also showed a wide differential between the cost of petrol and diesel fuel. Plummeting pump prices - down 18 per cent year on year - made Austria cheapest by far for diesel. At 83p per litre, this was nine pence less than for unleaded petrol. Spain saw price falls of seven per cent, making diesel five pence cheaper than petrol.

By contrast, despite a 19 per cent drop in the litre price over the past 12 months, the UK was the only country where diesel costs more than petrol - making it the second most expensive country after Norway. More positively, unleaded petrol is now 10 per cent cheaper at home than last year, spelling good news for ‘staycationers’.

Eurozone fuel prices continue to vary. The high cost of motoring in the Benelux countries made Belgium 27 per cent and the Netherlands over 32 per cent more expensive than Spain or Austria. The Netherlands was one of only three countries to register a petrol price rise, sharing a five per cent increase with Germany and Italy.

Outside the eurozone visitors to Sweden will get far more bang for their bucks than last year. Sweden registered the biggest price fall of 12 per cent for unleaded petrol and 32 per cent for diesel fuel, making it one of the cheapest motoring holiday destinations. Prices also fell dramatically for diesel fuel in Denmark (-28 per cent).

Sarah Munro, Post Office head of travel said: "Sterling is recovering just in time for the holiday season and combined with the price reductions for fuel and car hire, UK drivers can get more miles for the same money. Whilst price reductions introduced since last year are make motoring holidays an attractive proposition, tourists need to check the price of unleaded petrol compared to diesel to ensure they don’t get caught out."

The Post Office also examined holiday car hire costs in 20 countries, including the USA, where Florida prices have surged since last year. A combination of higher rental and fuel charges together with the impact of the weaker pound resulted in a 64 per cent increase for cars using unleaded fuel in the States.4

With a year-on-year price drop of 21 per cent, Portugal rated as best value for motoring in a hire car - registering the third largest drop after Greece (-36 per cent) and Sweden (-32 per cent).

Competitive three day rental rates and low unleaded and diesel fuel costs for 200 miles’ motoring put Portugal well ahead of its nearest rivals - the UK, Turkey and the Netherlands. At around £101, the total unleaded motoring cost in Portugal was just 38 per cent the amount in France (£264.10), where a 65 per cent car hire price hike caused the country to drop from 11th place in 2008 to the bottom of the table.

Sarah Munro said: "This year’s report shows more evidence of price cutting activity to boost tourism in popular European summer holiday resorts. The huge drop in car hire costs in both Portugal and Greece is great news for UK tourists and is another factor that should be taken into consideration when choosing a holiday this year.

"However we found little consistency in the charges made for one, three and seven days’ car hire. In some cases prices had risen substantially since last year for one day, while the same rental company showed reductions for longer hire periods - and vice versa. The clear message to consumers is to shop around and not to assume that a car hire company used in the past will still offer the best value.

"While motoring tourists can make great savings by choosing destinations with lower fuel or car hire prices, they should remember to buy currency in advance of their trip. By no means all petrol stations accept credit card payment and so it is wise to carry foreign currency purchased in the UK where the exchange rates are likely to be lower than at an ATM overseas."

All currencies in the Motoring on the Continent report are available at the Post Office. Over 70 currencies can be pre-ordered for next day branch collection at all 11,500 Post Office outlets or online at postoffice.co.uk. Home delivery can also be requested online. Euros are available over the counter at 8,700 Post Office branches, with US dollars also available at 2,600 of these. The full range of currencies is available at 1,600 Post Office branches.