Wednesday, 28 November 2012

SECONDARY RESEARCH - TRANSPORT COSTS

Running a Car:

Petrol prices have never been so high, and in the past few months, prices have risen to around 150p per litre in some areas of the UK. Which.co.uk, a website based around which car you should buy when making that life changing purchase, has worked out averages from over 2000 petrol stations across the UK to see the differences within local areas, and nationally to see where prices are higher, and how you can save money. Eventually this inflation will also start to effect costs of transport for industry therefore the prices of consumer goods will eventually rise also.

Which.co.uk found out some interesting facts about the current price of petrol in 2012 around the country:
- By keeping an eye on prices and shopping around your town for cheaper petrol you could save up to £200 per year.
- According to petrolprices.com, which can be seen below, it has been found out that filling up an average sized family car, such as a Ford Mondeo at service stations on motorways, can cost you £4.13 more than a standard town petrol station. Petrolprices.com can be seen below offering a sign up service to use their price check facilities, and email alerts. However it also claims that "on average PetrolPrices.com users save £2 per fill-up using our free email alerts".


- Petrol Stations at Supermarkets, however most noticeably Asda, were the cheapest in town (125p/l), encouraging shoppers to fill-up there, as well as shopping. 
- Independent or franchise stations are usually more expensive. As seen in Wrexham on the info-graphic below, there is a difference of +14p for the independent garage. Which.co.uk worked out filling up your family Mondeo at the supermarket instead would save you £218.84p per year, based on average miles driven per year. 

This info-graphic below shows the "biggest prices differences within five miles" in the same town:
Source: which


The recent economic downfall we have all witnessed, reflects the recession and inflation in oil prices from the 1980s. Which.co.uk compared records for Fords past and present, their favourite test cars, to see how much it cost to fill-up over the decades, leading up to 2011. This can be seen below:

Source: which

Found average prices for petrol per litre per year:

1980: 28p
1990: 47p
2000: 84p
2011: 129

Prices on the info-graphc above show the average spend per year on the right of the bar chart.

Source: skipad

This info-graphic was created by Confused.com showing petrol prices and shows inflation over the past 20 years, as well as looking at how it is sourced. The 2nd info-graph shows how many barrels of oil are produced in 'oil rich' countries per day, which are then refined to petrol and diesel. The top 10 countries are as followed:

1. Saudi Arabia - 10,520,000 b/pd
2. Russia - 10,270,000 b/pd
3. United States - 9,688,000 b/pd
4. Iran - 4,252,000 b/pd
5. China - 4,073,000 b/pd
6. Canada - 3,483,000 b/pd
7. Mexico - 2,983,000 b/pd
8. United Arab Emirates - 2,813,000 b/pd
9. Iraq - 2,642,000 b/pd
10. Nigeria - 2,458,000 b/pd

This sounds like a tremendous amount of oil being sourced per day, but no matter how much is being found and refined for use, prices are going up, even around Europe, with prices in Italy reaching 153p p/l and 107p p/l in Romania. A difference of 46p p/l across Europe on the 26th March 2012.


We also find out that 58% of the price of fuel is VAT, meaning that more than half of the cost we pay per litre for our petrol is actually extra taxes. Unfortunately whilst still in economic crisis this won't change and will remain sky high, even though it is already expensive enough to run a car, with insurance, MOTS, tax's etc.

Source: hypermiler

In approximately 60 years, we will have no oil to fuel cars and the rest of the transportation industry. This info-graphic above put together by moneysupermarket.com explains which alternative fuels may be used and why. 

Train Prices:

2012:

Source: atoc

"Changes to rail fares took effect from Monday 2nd January 2012. On average, fares have risen by 5.9%"

"We know that nobody likes paying more for their journey, particularly to travel to work. On this website you can find out:
  • Why fares have risen
  • Advice on how you can save money on your rail travel
  • Information on improvements to services, including more trains and better stations
  • How to find further information on train travel, including your train company's performance"
But why? I commute to college everyday via public transport, including the train and have felt the pinch from doing so on a daily basis, with another rise set for this upcoming January (2013). 

Below is an article which has been taken from the Association of Train Operating Companies website, stating exactly why rail fares are rising and what the extra money we are going to be spending going into. I have highlighted sections which I think are very important in understanding National Rail and how they operate, and even perhaps be a bit misleading. Even though it was published almost a year ago, it gives the most insight into the costs of travelling by rail with averages and breaks down costs. ATOC have not yet released a publication about the upcoming fare rise in January 2013.  


Rail fares for 2012 now available

20/12/2011Train fares will rise by an average of 5.9% in January 2012, the Association of Train Operating Companies (ATOC) has said. 

From Tuesday 20th December, fares valid from 2nd January 2012 can be found at National Rail Enquiries so people can check how much their ticket or any other fare will cost next year. This is a few weeks later than usual following the government’s decision on 29 November to lower the average rise it had set for Season tickets and some other fares in 2012.Michael Roberts, Chief Executive of ATOC, said: “Money raised through fares helps pay for new trains, faster services and better stations.
“The long-standing government approach to sustaining rail investment is to cut the contribution from taxpayers and increase the share paid for by passengers.
“The industry is working together to continue cutting costs as a way to help limit future fare rises and offer better value for money for taxpayers over the longer term.”
ATOC has launched a new website for passengers, explaining why many fares are going up, where money from fares goes and how to save money on rail travel. Click here
Q&A
Why do many fares rise every year?
The level of fare rises is determined largely by government policy. Since 2004 the government has sought to sustain investment in the railways by reducing the contribution from taxpayers and increasing the share paid by passengers.
Around half of all fares are linked by a government formula to July’s inflation rate as measured by the retail price index (RPI). These are known as regulated fares and comprise Season tickets for most commuter journeys and Off-Peak fares on most intercity journeys. Since 2004, the annual change in these fares overall has been set by the government at RPI plus one per cent.

The new fares for 2012 take effect from Monday 2nd January.
Hasn’t the government just cut fares?

On 29 November, the UK government announced that in January, regulated fares across most of England will rise by an average of RPI plus one per cent. This is a change to what the government announced in last year’s Spending Review when it said it wanted these fares to rise by RPI plus three per cent in 2012.Operators have been working hard to re-price millions of fares since the government’s change of policy in November.Devolved administrations in Scotland and Wales had already decided to keep regulated fares at RPI plus one per cent for Scotrail and many Arriva Trains Wales services, so most of Britain will now see the same average rise for regulated fares in 2012. Merseyrail’s franchise agreement with the local Passenger Transport Executive pegs regulated fares to RPI plus zero, and that remains the same. What about other fares?Train companies set remaining fares, known as unregulated tickets. These cover cheap Advance fares, leisure tickets for local journeys and business fares for intercity journeys at busier times of the day. Such fares tend to cover journeys where passengers could choose to drive, catch a bus or fly rather than travel by train, so prices reflect market conditions. Even these fares are heavily influenced by government policy. Operators have to meet tough financial commitments agreed with the government when franchise agreements are signed. For a number of years, these payments have been shaped by government policy to reduce the share paid for by taxpayers towards the cost of the running of the railways.How is ‘flex’ applied to regulated fares?
For many years the government has allowed train companies to vary individual regulated fares by up to 5% above, or by any amount below, the average change in regulated fares. This arrangement allows train companies to respond to changes in demand on particular routes or at individual stations, over the length of their franchises. This ‘flex’ was suspended for one year in 2010, and restored in 2011. 

Under ‘flex’, fares that go up by more than the average must be balanced by others that rise by less than the average, or that fall. These changes are weighted by revenue, meaning that train companies cannot put all the highest fare rises on the busiest routes. The Department for Transport uses a very strict compliance process set out in the franchise contracts that train companies sign to run services, to closely monitor the way operators apply flex. The process scrutinises all routes in the franchise to ensure the system is followed properly. 

How much do passengers and taxpayers pay towards the railways?

Public funding for the railways has dropped by a third since 2006/7, while the money raised through fares has steadily increased. Currently, passengers contribute around £6.5bn and taxpayers £4bn a year to the running of the railways.


Is anything being done to limit fare rises in the future?
Train companies and the wider rail industry know that in the longer term, the way to limit future fare increases is to reduce the overall cost of running the railways. That’s why train companies and other rail organisations are working with the government to cut costs and deliver better value for money for both passengers and taxpayers in the future. Overall annual costs have already fallen by more than £700million in the last five years.


Where does the money go?
For every pound of income that train companies receive:
48p goes to Network Rail (which charges operators to run trains on the tracks) and other infrastructure costs
17p goes on staff costs
17p goes on miscellaneous costs (including train maintenance, administration, contractors)
11p goes on leasing trains
4p goes on fuel / energy3p goes to train company profit


Where will money be invested?
With well over 1.3bn journeys a year, demand for rail travel has not been this high in peacetime since the 1920s. Journey numbers have increased by more than 5% during the first nine months of 2011. The money raised through fares - together with direct government funding for Network Rail - helps to make investment in the railways possible, to deal with this growing demand.
Hundreds of millions of pounds of investment in recent years has contributed to rail’s growing popularity. Record levels of passengers are satisfied with their service according to the independent watchdog Passenger Focus. According to the latest National Passenger Survey, 84% of passengers are satisfied with their overall journey, 11% are neither satisfied nor dissatisfied and 6% are dissatisfied. 
The government has committed to what it describes as one of the biggest packages of rail investment for a century. It will deliver more than 2,700 new rail carriages, the Crossrail and Thameslink projects in London, and more parts of the network are to be electrified which will see quicker, more reliable, greener journeys on trains with greater capacity.


Over the last year, passengers have seen:

New, more frequent and reliable services across north and south London thanks to more than £300m worth of improvements 
• A new fleet of diesel trains in the West Midlands and on the Chiltern route which has allowed significant capacity improvements in other areas of the country
 • The launch of a new timetable on the East Coast mainline giving more and faster services between London and West Yorkshire, Newcastle and Scotland. 
• A brand new £22m station at Newport in Wales
Major station and route works at Birmingham New Street and Reading  
In 2012, passengers will see:

More capacity on busy commuter services in the Thames Valley, Bristol, Manchester and Leeds.
• Hugely improved and extended Kings Cross mainline and Blackfriars stations in London. £900million has been spent on the two stations to give passengers better facilities and longer platforms
• A new £9.5million line and junction in York, allowing more trains and more reliable services on the East Coast and TransPennine routes. £17m is also being spent to improve reliability on the East Coast mainline.
• A transformed Edinburgh Waverley station in Scotland, where £150m is being spent on a new roof, better information systems, new platforms and concourse.

How do the fare changes affect different journeys?
Figures show that the average price paid for a single ticket is £5.00. Applying January’s 5.9% rise would see this figure rise to £5.30. Broken down by sector, this means the average price paid for a single journey will rise to:

- £3.85 in London and the South East – on average 23p per mile
- £21.18 on long distance routes – on average 22p per mile
- £3.48 on regional routes – on average 17p per mile

Why does ATOC publish an average figure?
There are tens of millions of fares in the system covering trains between our 2,500 stations to get millions of passengers around the country every day. ATOC seeks to give the public a general steer of how much, on average, fares will go up by in January by giving one overall figure. 
From Tuesday 20th December, fares valid from 2nd January 2012 can be found at National Rail Enquiries, so people can check how much their regular ticket – or any ticket – will cost next year.

Do all fares rise?

No. Some fares go up by more than the average, some fares go up by less than the average, some fares will stay at the same level, and some will go down.

2012 Fare Increase:

More capacity on busy commuter services in the Thames Valley, Bristol, Manchester and Leeds.
• Hugely improved and extended Kings Cross mainline and Blackfriars stations in London. £900million has been spent on the two stations to give passengers better facilities and longer platforms.
• A new £9.5million line and junction in York, allowing more trains and more reliable services on the East Coast and TransPennine routes. £17m is also being spent to improve reliability on the East Coast mainline.
• A transformed Edinburgh Waverley station in Scotland, where £150m is being spent on a new roof, better information systems, new platforms and concourse.

2013:

Prices are set to rise another 6% in the new year.

Cash-strapped commuters face ANOTHER fare increase: Ticket prices to rise by inflation-busting 6% in New Year 

  • New figures from train watchdogs revealed today
  • Regulated fares will rise by an average of 4.2 per cent
  • The rise could have been more if not for government intervention to limit regulated fare rises
  • Details of all fare rises expected in coming days

Read more: http://www.dailymail.co.uk/news/article-2239552/Train-ticket-prices-rise-inflation-busting-6-New-Year.html#ixzz2DXzHkl9K 


This means that in the past two years rail fares have risen by an average of 11.9%. Season ticket holders will of noticed a massive difference of anything between £10 and £300 extra being spent depending on location and usage date. My train ticket my Doncaster to Leeds is currently £13.80 per day, meaning in January it will be around £14.63 per day. A noticeable difference on a daily basis, weekly basis, and monthly basis. 

Source: kentonline

Rail prices for the Kent area are going to rise by the highest across the country, in January 2013.

Source: mayorwatch

Rail fare price inflation in London, showing new peak and off-peak fare prices from 2012 to 2013. 

As you can see the increase is 7.1% at the highest. 


Bus/Tube:

London mayor Boris Johnson was today accused of trying to bury bad news as he confirmed above-inflation increases in tube and bus fares.
He announced a 4.2% average increase from January 2 2013 - and said the figure would have been higher had he not managed to secure additional funding of £96m.
Oyster card tube payments were to be frozen but that did not prevent a furious attack from Manuel Cortes, the leader of the TSSA rail union, who said: "Boris deserves a gold medal in cynicism. Not only does he try to bury bad news on the back of Obama's victory, he also jacks up fares at twice the rate of inflation.
"He also manages to break two election pledges into the bargain, by hiking charges for bikes as well as inflation-busting fare increases. He is the Pinocchio of British politics."
The mayor had also confirmed that charges for his "Boris bike" Barclays Cycle Hire scheme would double.
Such a move would see daily hire going up from £1 to £2, weekly access rising from £5 to £10 and yearly membership going up from £45 to £90.
"We believe there should be a policy of freezing fares to recognise the tough times people are facing, to increase the use of public transport and to help boost the economy."
His words were backed by Richard Hebditch, campaigns director at Campaign for Better Transport.
"By putting fares up above inflation, he is hitting hard-pressed families in the pocket simply for travelling to work."

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