The Cost of Living Crisis: Surviving the Unsurvivable

Inhumane Profits

Although fuel prices have begun to decline, they remain exceptionally high. In June, petrol reached 191 pence per litre and diesel 199 pence. Many drivers could no longer afford to use their vehicles, forcing them to choose between necessities such as food or fuel. Meanwhile, companies such as BP and Shell reported unprecedented profits. Shell made £3 billion in the last quarter and BP £7 billion.

The cost of crude oil fell last month, yet BP chose not to reduce prices, maintaining high margins instead. Motor industry organisations have criticised fuel companies for failing to ease pressure on consumers. The RAC stated that drivers are still paying an average of 183 pence per litre for petrol and that this margin should be reduced.

In May, the government introduced an additional 25% tax on oil and gas profits to address rising fuel prices. However, the measure did not apply to the first quarter and has yet to produce a significant impact.

Surviving the Unsurvivable

With limited government support and rising hardship, communities have become essential sources of help. The government is gradually implementing policies to ease the crisis. From October, the Energy Bills Support Scheme will provide households with a £400 payment toward energy bills. The Warm Home Discount Scheme will offer eligible households £150 off electricity bills.

Despite these measures, public confidence remains low. Reports that Rishi Sunak will spend £13,000 heating his swimming pool, an amount more than six times the average household energy bill, have intensified concerns about government priorities.

Charities have stepped in to fill the gap. Eat or Heat provides free food to those struggling, recognising that two in five people now ask themselves whether they should eat or heat their homes. The charity hosts fundraising events such as quiz nights and raffles to maintain essential services.

The Post Office aims to raise £250,000 by donating one penny from every cash withdrawal to support 1,300 foodbanks. Asda will double the number of stores selling its budget food range. While it is encouraging to see large companies helping, it is troubling that small charities and supermarkets are carrying the burden rather than the government.

Is There Light at the End of the Tunnel?

The crisis has been driven partly by the war between Russia and Ukraine. Russia is one of the world’s largest oil exporters, supplying more than 8.2 million barrels per day in 2022. Sanctions imposed by countries such as the United Kingdom have reduced access to Russian oil, increasing demand from other producers and driving up prices.

Fuel prices were rising before the war due to fluctuations in supply and demand, but the conflict accelerated the trend.

Inflation is predicted to begin falling in early 2023. According to the Bank of England, energy and goods prices are not expected to rise as sharply as they did this year. Reduced demand for fuel should also contribute to lower prices. The Bank of England has set an inflation target of 2%, and the current rate of 9.4% is expected to fall closer to this target within the next 2 years.

Despite bleak news and fears of recession, there is room for cautious optimism. Communities and charities continue to support one another, and the government has promised further measures to reduce costs. While uncertainty remains, the collective effort suggests that the crisis will eventually ease.