The study from Capital Economics, an independent consultancy, found that essential bills now account for 31% of the average family's take-home pay, up from 25% six years ago. And things look set to get worse.
The price of oil continues to climb. London Brent Crude broke through the $120 a barrel mark for the first time on Tuesday, while US Light Crude also hit a new high of $122 a barrel. The cost of 'black gold' has soared in recent months, having only broken through the $100-mark in February and analysts warn it has not peaked yet.
Investment bank Goldman Sachs believes that it could breach $200 a barrel in as little as six months.
This will be bad news for households, many of which are already struggling to cope with soaring energy and fuel bills. Vote now in our poll: How concerned are you about rising oil prices?
Gas and electricity prices have risen by an average of 15% so far this year and there could be a further round of price increases around the corner. Oil is not the only commodity soaring in price - the cost of wholesale gas and coal are also on the up. Capital Economics believes energy prices could rise another 8% to 10% before the end of the year.
Fuel costs have also soared. In April alone the cost of unleaded petrol rose by an average of 1.3p a litre, while diesel went up by 3.1p a litre. Motorists are now paying an average of 110.6p a litre for petrol, while those with diesel vehicles are forking out 120.9p a litre, according to the AA.
For many families, every penny counts at the moment: not only are they facing rising household bills but the credit crunch is affecting the cost of borrowing. Our article, Tips to survive the credit crunch, offers guidance on how to ease the pressure on the purse-strings, but read on for specific advice on how to minimise the impact of rising fuel and energy costs.
Pain at the pump
Petrol prices are at a 20-year high and motorists are now paying around 25% more to fill up a tank, than they were last year.
Oil companies are reaping the rewards of rising oil prices, but with BP and Shell having recently announced record profits, pressure is mounting on the fuel giants to spare consumers some of the pain and not to pass on the full increase in the cost of oil.
The Chancellor, Alistair Darling, announced in the Budget that a planned 2p increase in fuel duty would be postponed until October. However, he is now under pressure to delay the increase further.
In the meantime, there are things individuals can do themselves to minimise their fuel bills.
While the average price of a litre of unleaded is now 110.6p, prices vary significantly, so it is well worth identifying the cheapest provider in your area. Unfortunately those in rural areas tend to pay more as there is less local competition. Motorway service stations are also expensive places to refill. The large supermarkets that offer petrol tend to be competitively priced. You can find the cheapest filling station in your area by inputting your postcode at petrolprices.com.
There are many more tips that can help you gain more miles to the gallon including:
-
Keep your car in good shape - Keeping tyres inflated to the correct pressure could save as much as 5% on fuel economy. Replace your air filter where necessary and use the recommended fuel and oil for your vehicle.
-
Watch your speed - Driving at 70mph consumes 25% more fuel than driving at 50mph. When legal, 56mph is the optimum speed for most vehicles.
-
Plan your journey - Avoid traveling in rush hour and cut out as many short journeys as possible.
-
Car sharing - See if a colleague lives close by - you could cut your fuel costs in half by taking turns to drive each day.
-
Top gear - Stick to the highest gear you can as more fuel is consumed when traveling in lower gears.
- Reduce motoring costs - Look at reducing your motoring costs in general to offset the increased costs at the pump. Driving a green car could eliminate congestion charges and you should also consider alternative methods of transport and shop around for cheap car insurance. And if you are thinking of changing your car, consider buying a more economical model. Our motoring channel provides car reviews and price guides.
Don't forget gas and electricity
You might have finally turned the central heating off but don't put your energy bills on the back burner. Gas and electricity bills have already risen by an average of 15% this year and many analysts are expecting further hikes over the coming months because wholesale prices remain high.
Two providers, British Gas and EDF, have recently pulled their fixed rate products - this is often a precursor to a price hike, although none of the energy firms have yet announced price increases.
In fact, while British Gas has pulled its Price Protection 2009 tariff, it has bucked the trend and reduced the cost of its Click Energy 5 product, which is an online deal. This is now the cheapest option for many households. Npower's Sol 11 deal is another competitive deal.
A household with average consumption would pay £866 a year with British Gas Click Energy 5 and £878 with Npower Sol 11 if they opted to pay monthly by direct debit. By contrast, if they were on either provider's standard tariff and paid quarterly by cash or cheque, they would pay around £1,055 a year.
Millions of households stand to make significant savings by switching energy provider. An easy way to find out which is the cheapest product for your circumstances, is to use a comparison site. By entering your postcode and your consumption (based on past gas and electric bills) or spend you can retrieve quotes from all major providers in minutes.
Have your say: How are rising petrol and diesel prices affecting you? Are you thinking of changing to a more fuel-efficient car or are you having to cut back in other areas so you can afford fuel? And what about the record profits announced by BP and Shell recently - are they justified or should they be doing more to help the consumer? Visit our community forum and let us know your views.
Disclaimer: Please note that any rates or deals mentioned in this article were available at the time of writing.
Rate This Article
Click on a star to rate this article.
