Fuel's Gold

Susannah Streeter: Hello and welcome to Switch Your Money On from Hargreaves Lansdown. I'm Susannah Streeter, I'm the Senior Investment and Markets Analyst here at Hargreaves Lansdown and as usual I'm with Sarah Coles, our Senior Personal Finance Analyst. So, Sarah, fuel prices rather than house prices really have taken over as the big topic of conversation, given the energy squeeze we're currently experiencing. I've been travelling on holiday through France and Spain over the past few weeks or so and although the prices are still high, it does seem to be a bit cheaper at the pumps.

Sarah Coles: I'm very jealous, although here in the UK prices are a bit all over the place at the moment too. So, I know when I fail to plan ahead and end up filling up on the motorway, I'm keen to put in as little as possible because I just want to get closer to the next cheapest forecourt. So, overall, thankfully, we're seeing prices dip compared to the spike we saw at the end of June and the start of July, and according to the RAC, petrol was under 174p per litre in the middle of August and it's set to fall further. So that's down from the peak of 191p per litre on 1st July. It's a world away from the kinds of levels we saw when the world shut down in May 2020 and prices went below 107p.

Susannah Streeter: Yes, crude oil prices have been slipping, falling back to below $100 a barrel for the benchmark, Brent Crude, partly as concerns rise about the global economic slowdown. But compared to the start of the year, motorists are still having to pay some pretty eye-watering prices.

Sarah Coles: So you might think that what goes up must come down, but although hikes seem to be very swift when the cost of oil rises, reductions at the pump seem to be on go-slow when it dips. So, this is known as the rocket and feather effect. They shoot up but seem to float down only gradually. We'll have to see whether that will continue, given that lower oil prices have persisted. Right now everyone is desperate for a bit more relief, particularly given that the energy price cap for the fuel we use in our homes is set to be hiked horrendously. And as we record this, the announcement of the price cap is just days away, so October's rise is gong to be bad enough but the cap is expected to rise in both January and April next year to almost £4,500 a year.

Susannah Streeter: So in this podcast we're going to be diving deep into the barrel of prices to find out what's going on from the oil fields to the refineries and the forecourts in an episode we're calling Fuel's Gold.

Sarah Coles: Yes, we'll be talking to Peter Malone, he runs Bettyhill General Merchants Post Office and fuel station near Thurso in the Scottish Highlands and he knows just what it's been like operating at a time of eye-watering prices. So, hi Peter. Have you ever seen prices like this before?

Peter Malone: No, we've never seen anything quite as high as we're currently experiencing, and I look forward to having a chat with you about it later.

Sarah Coles: Thanks Peter, we're really looking forward to finding out much more later in the podcast. Now, amid calls for a windfall tax on energy companies given sky-high fuel costs, we're also going to find out what all of this means for listed companies in the sector with our Lead Equity Analyst, Sophie Lund-Yates.

Sophie Lund-Yates: Hi, great to be back and can't wait to get stuck into this topic, an absolutely huge one at the moment, so chat to you a bit later.

Sarah Coles: Thanks Sophie. There's a lot to talk about. Plus we'll be catching up with Emma Wall, our Head of Investment Analysis and Research, who has been speaking to Hugh Gimber, Global Market Strategist at J.P. Morgan Asset Management.

Susannah Streeter: And we will of course have the quiz and we'll be delving into the business of service stations, and I've been digging out some of the odder facts about forecourts. But before we drill down into why petrol has become just so expensive this year, we should discuss the energy price cap for October which is due to be announced in the days after we record this podcast.

Sarah Coles: Yes, we already know that the price cap in October is going to be a major hike, even from the current sky-high prices, to around £3,500 and this is just the start of it. So, if the predictions are correct and the price cap hits almost £4,500 in April next year then we'll face prices almost three and a half times the level they were in March this year. That's feeding significantly into inflation and it's expected to keep doing so. Because people on lower incomes spend a greater proportion of their income on the essentials, it means they're being squeezed particularly hard. So the Institute for Fiscal Studies found that, right now, the poorest fifth of earners face inflation of 10.8%, while the richest fifth face price rises of 8.5%. Now, the gap's going to grow by October so that the poorest fifth have inflation of 17.6% and the richest fifth, 10.9%. The risk is that with so much of our income tied up in paying the bills it will mean some really horrible decisions forced on those on the lowest incomes. For those earning a bit more, they're going to need to tighten their belts, and of course when they cut back so much elsewhere it raises the risk of recession.

Susannah Streeter: Energy prices are affected particularly powerfully by the wholesale price of gas, which has spiked in the wake of the invasion of Ukraine. Now, this has also taken its toll on oil. The price for crude oil which is used to make petrol and diesel has gone up. Crude was cheaper when the pandemic began as demand for energy fell off a cliff as businesses closed temporarily, but as economies opened back up, demand for energy surged. So, fuel prices were already rising pretty sharply before Russia invaded Ukraine in February, but the war added fuel to the fire of prices, mainly because of sanctions imposed on Russia as a result of its aggression. The US has announced a complete ban on Russian oil imports, the UK is phasing out Russian oil and EU leaders say they'll block most Russian oil imports by the end of the year. Now, this means demand for oil from other producers has increased leading to higher prices, and meanwhile oil-producing countries cut back production significantly during the pandemic to support prices. Even though they've increased it since, it hasn't been enough to stop prices rising sky high. Now, the UK might only have imported around 9% of its crude oil from Russia, it's still affected when global prices rise.

Sarah Coles: And you mentioned that petrol and diesel seem cheaper in France and Spain. Well, remember, a big chunk of the price we pay at the pump is made up of fuel duty, and that's around 31%, and most other countries across Europe have cut duty more sharply than the UK. In France, fuel duty has been cut by the equivalent of 15p, or in Spain the discount is more like 17p, and in Germany there's been a 25p equivalent cut. Here in the UK, fuel duty was cut by 5p and the RAC says only Luxembourg has done less. The Conservative Party leadership contender Liz Truss has promised to cut fuel duty by more than 5p. And VAT is another major chunk of petrol prices. It means that if both were reduced to zero, the price of a litre of petrol would fall by 82p, which would take us well below the lowest price at the quietest time of the pandemic.

Susannah Streeter: Another problem is that the oil used to make petrol is paid for in US dollars. The pound has been weaker against the dollar, making fuel even more expensive. The question is, why aren't we seeing prices fall back in tandem with the lower price of crude in recent weeks? Petrol retailers have been blamed for not passing on price reductions fast enough, despite falling oil prices and the spring cut in fuel duty. It's a conundrum the UK's competition watchdog, the Competition and Markets Authority has been looking at. In its review published in July it said that it found no evidence that retailers were not passing on the cut in fuel duty, however, it did find cause for concern in some parts of the road fuel market, and highlighted the growing gap between the price of crude oil when it enters refineries and the wholesale price when it leaves refineries as petrol or diesel. The so-called refining spread. This has tripled in the past year. The growing gap accounts for around 40% of the growth in road fuel prices, amounting to around 24p per litre. Now, over the same period the retailer spread, the difference between the wholesale price and the price charged to motorists did fluctuate but remained about 10p per litre on average. So, now the CMA is going to look at the market in more depth, launching a market study which will report back in the autumn. So, let's get a view now on just where the costs are mounting up in the fuel supply chain from Peter Malone. He runs Bettyhill General Merchants Post Office and fuel station in Thurso in the Scottish Highlands. So, Peter, great to have you with us. Can you tell us a little bit more about your business?

Peter Malone: We're a small independent general merchants. We have a Post Office, we are an off-licence, we sell groceries but we also have a fuel station and it's located on the A836, the majority of which is part of the busy NC500 tourist route.

Susannah Streeter: So, you're really catering to so many different customers, from fuel to general merchandise. I mean, have the changing prices, particularly at the pumps, affected your business? What are you doing as a result of it?

Peter Malone: Yes, it has. Fuel prices have been as high as £2.10 for diesel and almost £2.05 for a litre of petrol. They have come down slightly in the last couple of weeks but we've seen a significant impact on people's buying patterns in terms of what they're trying to do. We cater to locals as well as tourists and that includes things like the emergency services, the school buses, the care workers, the nurses. So, we're seeing a lot of pressure on a lot of people because of high fuel prices.

Susannah Streeter: So, you talk about those key workers, Peter. It must be so difficult for them. Are they, kind of, not filling up full tanks and hoping perhaps that the following week when they top up again that the prices might have come down a bit? Just what, kind of, struggle are you seeing?

Peter Malone: We're seeing a significant struggle. You're absolutely right that the people who rely on transport to get to their jobs or to service their clients, they're buying smaller amounts more frequently in the hope that the next time they come, fuel prices will go down. We're also seeing a particular pressure on tourists. You know, we're not seeing as many domestic tourists this year as we had seen in previous years and part of that, I'm absolutely positive, is down to exceptionally high fuel prices.

Susannah Streeter: Are you finding it easy to remain stocked? We talk about all the different problems there's been in the supply chain. How easy is it for you to get ready supplies?

Peter Malone: Well, if we're talking about fuel, we're dependent on a single supplier and it does depend on that supplier having stocks in one of his depots. People are actually shipping fuel to us from about 100, 120 miles away so, you know, we have to be very careful in terms of how we manage fuel stocks. For general items sold through the shop we're still seeing shortages of certain things. You can't be absolutely certain one week from the next what you're going to be able to buy. So, for instance we placed an order this weekend, our normal, usual grocery order, and our wholesale is restricting things like the amount of bottled water that you can buy, or the amount of certain alcoholic beverages that you can buy. There's still restrictions and blocks in the supply chain for all sorts of things that we would normally stock and sell.

Sarah Coles: Petrol prices are dropping black slightly from some of those really big highs. Is that something that's reflected in your experience or is it because you've got the additional, sort of, travel and the journey on top, is it a struggle to bring prices down?

Peter Malone: It is a struggle to bring prices down. We're a small, independent fuel retailer so we don't have the buying power of the big supermarkets or multis or chains. We're dependent on a single supplier and it very much depends on what he's offering the fuel at. We have no option but to buy and so our price reflects the wholesale price that he charges to us. What we've done when prices were at their absolute highest, we took the decision that we would actually sell at no margin, that we would sell at cost price because we live in a rural community. Everybody is dependent on transport to get to their work, get to the shop, get to the school, and we felt it was important that we helped to support the community. They support us and we felt that that was a little thing that we could do to help to support them when things were really tight.

Susannah Streeter: Do you find it frustrating then, Peter, when petrol retailers across the board are accused of gouging their customers?

Peter Malone: Yes. It's quite interesting, that. We get that, sort of, comment occasionally here but we also get the comment that we're cheaper than some places in London, we're cheaper than some places on the main motorway networks. A fuel retailer like us would normally make about 6p or 7p on a litre of fuel. I've seen that down to as little as 0p and 1p. One of the things that you have to remember is that the person who makes the most out of fuel is the government. For every £10 of fuel that you put in your vehicle, the government takes almost £5 in fuel duty and VAT.

Susannah Streeter: So, when you look at the comparison of the fuel duty cut in the UK compared to Europe, for example, what would you say?

Peter Malone: I think it's outrageous. Motorists in this country are paying fuel duty at a much higher rate than everywhere else around Europe.

Sarah Coles: So, do you think that the answer to the current, sort of, peaks is some intervention from the government? Do you think there's anything else that can be done to help bring prices down?

Peter Malone: I don't think there's anything else that can be done to bring prices down. We're in the situation where it's a supply and demand situation that has forced fuel prices so high. I think what the government could do is the government could look at a VAT cut on fuel that would provide some temporary relief for road users.

Sarah Coles: Looking ahead, do you see a time when prices will come down, there’s obviously been sort of small changes recently, do you have hope that there’s going to be a point when we’ve seen the peak and prices will drop back?

Peter Malone: I think we probably have seen the peak unless something really horrendous happens in the fuel markets. We are seeing fuel prices starting to drop. How low will they go? Is it going to drop back as far as 130p? I doubt it very much. Will it drop a bit further? Yes, probably.

Sarah Coles: That will come inevitably as real relief, won't it, for your customers but I suppose when you talk about the other items that you stock, still food prices don't look like they're coming down immediately so it's still going to be pretty tough, would you say?

Peter Malone: I think it's going to be tough for all small retailers. There is extensive inflationary pressure on food prices. Some of that is driven by shortages, some of that is driven by increasing fuel costs and power costs so the production costs are going up, and some of it is just caused by shortages. There's going to be inflationary pressures I think for at least the next twelve months.

Susannah Streeter: Okay, well, Peter, thank you. Inflationary pressures are set to stay certainly for the time being it seems and it's really great to hear about your efforts in trying to support the community.

Peter Malone: Thanks very much for the opportunity to chat.

Susannah Streeter: So that's the view from one side of the pumps and now we're going to bring in Sophie Lund-Yates, our Lead Equity Analyst here at HL. So, Sophie, you've been looking at some of the listed energy companies. First of all, what's your take on BP and Shell amid all of this?

Sophie Lund-Yates: Hi Susannah. So, yes, there are two big oil majors in the UK and they have been hitting headlines surrounding petrol prices of course in recent weeks, with some arguing that they shouldn't be profiting quite so much from increased wholesale energy prices. I would point out that this is a sentiment surrounding the wider sector too, so it is a bigger question than simply pointing the finger at these two. But looking beyond the traditional energy businesses, it's really helpful to compare how BP and Shell are tackling the question of climate change and renewable energy. The reason I bring that up in this episode is that one potential use of the extra money being generated while oil prices are high is increased spending or increasing spending on low-carbon technology and infrastructure. So, starting with BP, BP has big plans to increase exposure to renewable and lower carbon energy sources. Around a third of its $14 billion-$15 billion capital expenditure is being put aside to bulk out biofuel and hydrogen outputs. There's also planned investment in increasing electric vehicle charging. It's also committed to lowering the carbon intensity of its remaining oil and gas assets. BP has said that it anticipates spending more than double the profit it generates in the UK out to 2025 or so on projects geared towards the energy transition.

So, no real doubt that BP is grasping the nettle here and taking what can only really be described as a relatively aggressive approach to the transition. The cash flows generated by the legacy oil and gas businesses are funding this for now and that's where, you know, the higher prices and the profit coming from that play into that too.

But BP is betting on the fact that the energy space will be a very different landscape within the next decade. BP is perhaps worth attention from investors who maybe thought oil and gas majors were the opposite of renewables, in fact a big part of the investment to fund the shift is coming from BP. The approach is admirable but it does carry some extra risk.

Susannah Streeter: So, what about Shell then?

Sophie Lund-Yates: The importance of renewable energy isn't lost on Shell either. It has lots of plans in the pipeline including buying up solar capacity, bulking up renewable platforms, building hydrogen plants and off-shore wind power generation. Shell is committed specifically to halving emissions from its operations by 2030, now that is a great target but I would say it's not immediately clear how that's going to happen. It either requires massive investment commitments or a restructuring of the current business. I think the way we've phrased this in some of our existing research is to say that Shell can afford to dabble in renewables while oil prices are high and before they reverse. It's essential the group gets its renewables project firmly on course while it's got this strong wind in its sails in the form of higher prices. I have a bit more cautious optimism where Shell's renewables plans stand but it's fair to say there's a bit less of a clear-cut plan. That could work in its favour if the energy transition happens at a slower pace than expected but there's also the growing importance of ESG, so that's environmental, social and governance issues for today's investors. I'm not saying that Shell deserves to be put in the ethical waste bin at this point but there will be some wondering if and when its renewables efforts will kick up a gear.

Sarah Coles: Certainly the current price situation at the pumps has led to a spark of interest in EVs, which of course can be powered by renewable fuels and environmental responsibility in investors' portfolios. So, what other companies have caught your eye?

Sophie Lund-Yates: Thanks, Sarah. So, I've been looking at First Solar, First Solar produces advanced thin films that go on newer generation solar panels, so as you can imagine it's a potential option for investors that want direct exposure to a company that's tackling the renewable energy question, which as you said has been heightened by the current situation. Their invention is also lower carbon than traditional silicon panels. The group has research and development labs in California and Ohio over in the US, which is also where the shares are listed so keep that in mind as depending on your provider there may be higher dealing charges for overseas shares. There is cost inflation to deal with for this company but it seems to be doing a reasonable job at reducing cost per watt produced. Last year, earnings per share of $4.38 actually came in above the mid-point of the guidance range, which is no mean feat really. A real benefit to First Solar is that it's sitting on a huge backlog of bookings with the backlog equivalent to 22 gigawatts at the end of last year, so while that's not a cure all for every challenge, it does give some visibility over demand. In terms of challenges and things to watch out for, like most energy industries, solar is susceptible to pricing and supply volatility. It's fair to say First Solar is in an attractive market as the world looks to reduce its reliance on traditional energy, but the group's valuation of over 100 on a price to earnings basis means expectations for the future are incredibly high and there will be sharp market reactions to any missteps or change of sentiment.

Susannah Streeter: Okay, Sophie. Really interesting round-up there. Thank you very much, as usual, for joining us on the podcast.

Sophie Lund-Yates: Yes, thanks both. Definitely a huge topic at the moment and great to unpick some of the specific companies that are embroiled in all of this.

Sarah Coles: So, let's bring in Emma Wall now, our Head of Investment Analysis and Research here at HL. She's been talking to Hugh Gimber, Global Market Strategist at J.P. Morgan Asset Management.

Emma Wall: Hi Hugh.

Hugh Gimber: Hi.

Emma Wall: So, we're here today to talk about the price of oil but before we look into our crystal balls and work out what is coming in the next couple of years, I thought maybe we could do a recap on what's driven the market over the last two to three years because it has been extremely volatile, driven in the most part by two major macroeconomic political events, hasn't it?

Hugh Gimber: Absolutely. So, for me, oil is like any other commodity really in that it's driven by supply and demand and so you go back to the pandemic first of all, run back to February 2020 and we saw some really, really sharp declines in oil prices because, typically, in an average year, road traffic contributes about half of all oil demand. So, you stop everyone from moving around, you crush demand and therefore the market said, 'Well, we need to drive oil prices lower because we just don't know when that's going to recover.' Roll forward a couple of years, you've seen that steady improvement in the global economy, the reopening that everyone has been enjoying has been putting upward pressure on oil prices. Then we get to February of 2022 and Russia's invasion of Ukraine, which was really the catalyst for another very, very sharp, fast move higher in oil prices, not so much because of demand but rather this time because of supply and fears that the exports of oil coming from Russia were going to be shut off to the global economy.

Emma Wall: Now, part of what drives valuations in any asset class is the lack of certainty, so we saw with the stock market, for example, there was a major downturn when Russia tragically invaded Ukraine but some of that then levied out a bit as people started to price in the expectation of how long the war would last. You haven't seen that so much with oil because, as you say, it's so intrinsically linked to supply, so at the risk of asking the multi-trillion dollar question, what does come next?

Hugh Gimber: So, I think there are going to be two main factors here for me, the first one is the outlook for the global economy because we've seen in terms of Russia, that actually Russian oil has continued to flow around the world and even if it's not been coming as quickly to the US or Europe, it's been going to places like India and China. The Russian impact on the oil market has not been as big as many would have expected back in February or March when uncertainty peaked, as you highlighted. I think in the near-term it's really going to be a question of how well does the global economy hold up. Looking more, kind of, twelve, eighteen months out, I still think oil markets are going to be fairly tight. I still think that the balance of demand and supply is going to be pretty well-matched because another of the longer-term themes here is the lack of investment that we've had into the energy sector, and that's been a multi-year issue for many reasons. Part of which is driven by the push towards a bigger focus on sustainability, and therefore constraining the flow of capital to the energy sector to fund new investment. Part of it is scars as well of some of the sharp falls in oil prices making energy companies more nervous about expanding capacity. So, over the next six months or so it's going to be driven by the outlook for the global economy but even if we do go into a recession, as the economy recovers, as we move through 2023, I think we're still going to be left with a situation where supply is really struggling to keep up with demand and therefore keeping oil prices at a relatively high level.

Emma Wall: Now, if you'll excuse the pun, oil quite literally fuels huge parts of the economy and so therefore if what you say is right and we do see oil prices remain high for some time, where is that pinch felt? It's not just in the consumer's pocket, is it? It's not just the cost of living which is affected.

Hugh Gimber: No, you're right. It's all across the board and particularly for the corporate sector where you don't have the same level of price cap as we do for the consumers. Lots of focus obviously in the UK at the moment, and rightly so, about how the government might respond to the cost of living but corporates don't have that same protection. They're facing an even bigger squeeze and so when I think about the implications for corporate earnings, energy costs are going to be a big part of that. The margin squeeze that's already been underway so far this year I think is likely to get worse as we move into 2023, as energy costs start to really eat away at corporate profits.

Emma Wall: Are there parts of the world that feel this more keenly? I've talked to a couple of economists about the difference between the UK and the US in that the US doesn't have the same, sort of, energy interdependency globally. It is rather autonomous when it comes to its oil and gas production. Does this mean that perhaps the US is a little bit more protected from these, sort of, soaring prices and here in the UK, and indeed across Europe, we are just a bit more exposed to what's happening in terms of Russia and supply, and oil prices being so high?

Hugh Gimber: That's absolutely fair. If you're an energy importer, it doesn't really matter where you're getting your energy from, if you're having to buy it on the open market then you're going to be impacted by very, very tight levels of supply, so yes it's the UK and Europe within developed markets that are feeling the pinch. I'd throw another angle into the mix here as well and to say that this is going to have a very different impact on countries within the emerging markets depending on whether you're a commodity exporter or a commodity importer. In very simple terms, generally, higher commodity prices typically favour places like Latin America which often are very large commodity exporters and they can hurt parts of Asia that typically import much more of their commodities. It'll have that, kind of, divergent impact across EM depending on the trade balance that you're looking at.

Emma Wall: As well as staying high, I presume volatility is here to stay because we've seen a lot of that, even in the last six months that, yes, historically compared to a couple of years about the price is higher but it also jumps around a lot. Would you expect to see oil and other commodities continue to have that volatility?

Hugh Gimber: I would for two reasons. The first is that economic uncertainty is very high. Forecasting where the economy is going to be in one month's time, let alone one year's time, is very difficult today and so that should feed through into more volatility in markets such as oil that are sensitive to what's happening in the economy and then the second one is geopolitics. How the UK and the European Union decide to proceed with the sanctions that they're imposing on Russian exports, how places like the US perhaps try and release some more of the reserves that they've had in stock to try and support that market. You look at the role that China could play in this as well, I think there's a big geopolitical angle to the outlook for commodities and as we always talk about, predicting geopolitics is very difficult indeed and therefore, that, I think is another reason that should feed into higher levels of commodity price volatility in the months to come.

Emma Wall: Hugh, thank you very much.

Hugh Gimber: Thank you.

Sarah Coles: That was Emma Wall talking to Hugh Gimber, Global Market Strategist at J.P. Morgan Asset Management.

Susannah Streeter: Please bear in mind that these are the views of the fund manager and are not individual stock recommendations. You're listening to Switch Your Money On from Hargreaves Lansdown. If you're enjoying this podcast please do let us know what you think and do subscribe wherever you get your podcasts so you get a fresh new episode in your inbox as soon as it's ready.

Sarah Coles: And finally, it's time for the quiz. And Susannah's been delving into the history of filling stations.

Susannah Streeter: Yes, I never thought I'd become quite so much of an expert on filling stations but it's always surprising where this podcast takes us. Okay, are you ready for this, Sarah? According to the UK Petroleum Association, there are around 8,000 filling stations in the UK but how many were there in 1970? You've got three options, was it 4,000, 15,000 or 37,000?

Sarah Coles: Now, I'd have thought the number of petrol stations would have grown when car ownership went up but now I'm wondering whether that's what you want me to think. Okay, I'll take the bait. I'll go with 4,000.

Susannah Streeter: No, I'm afraid not. It was 37,000. It's remarkable, isn't it? The industry really has consolidated. We've lost many thousands of independent filling stations, many in isolated and rural communities, and supermarkets now dominate the industry. Okay, no luck so far. Next up, what was considered to be the location for the first ever filling station? Was it a military depot outside of Chicago, was it a pharmacy near Mannheim in Germany or was it at a factory near Manchester in England?

Sarah Coles: Blimey, where did you find this? Okay, so I'm just going to have to take a wild guess, so I reckon the military probably filled their own vehicles so it's going to be one of the others, so I'll say a factory near Manchester.

Susannah Streeter: Sorry, not quite. It was in fact a pharmacy near Mannheim in Germany and the first person to fill up was Bertha Benz, wife and business partner of Carl Benz who invented the first gasoline-powered automobile, which only had three wheels, back in 1885. It was only taken for short test drives until Bertha took it on the first road trip from Mannheim to Pforzheim and along the way she refuelled by purchasing a petrol solvent used as a fuel at a pharmacy in Wiesloch. Now, for quite a few years, pharmacies continued to sell motor fuels as a side line. Apparently she ran into quite a few problems on that road trip, which she went on to prove the invention was commercially viable. A blocked fuel line was apparently cleared using her hat pin and her garter was improvised to insulate an ignition wire. The mother of invention was driving that car, clearly.

Sarah Coles: She sounds like a really handy person to have around. I mean, by comparison, twenty years ago I had to call the AA when I had a flat tyre. In my defence, my car had been broken into and they had stolen the spare but still, it was just terrible.

Susannah Streeter: That must have been an embarrassing call when you realised. Okay, next question, Sarah. Can you tell me where the first service station in the UK opened in 1959? Was it Watford Gap, Leigh Delamere or Tebay?

Sarah Coles: Oh. Now, I do a fair bit of driving, including two of those three, so I know Watford Gap is on the M1 and I know the other two are on the M5 and the M6 so logically it should be Watford Gap.

Susannah Streeter: Yes, well worked out. It was Watford Gap on the M1, the country's first full-length motorway. One correct, Sarah. Well done. Okay, finally, what is the main mission for customers visiting a forecourt? Is it to buy petrol, to buy diesel or to buy food to go?

Sarah Coles: Well, I mainly use mine for the cashpoint but that's because it's the only place where you can park and take money out near here, but given that's not on the list, well, I know there's more petrol cars than diesel but then there's loads of diesel lorries, aren't there? So, I'm going to say it's to buy diesel.

Susannah Streeter: No, you'd have been better off sticking with non-fuel related answers because it's actually number three. Purchase food to go and this is according to research by Lumina Intelligence. Forecourt shops are now not seen as petrol stations but rather as convenience stores which sell petrol and there's been a 12% increase in average weekly spend at forecourts compared to a year ago. It's certainly true in my family. Our local forecourt has a milkshake machine which I'm always pestered to go to, so I invariably fill up while I'm there and take away a few bags of cut price bagels whilst I'm at it as we get through so many in my house.

Sarah Coles: Yes, I suppose I'm not allowed to come back from the cashpoint without a bag of Percy Pigs either, so I'm in the same boat.

Susannah Streeter: Well, that's all from us for this time but before we go, we need to remind you that this was recorded on 22nd August 2022 and all information was correct at the time of recording.

Sarah Coles: Nothing in this podcast is personal advice, you should seek advice if you're not sure what's right for you. Investments rise and fall in value so you could get back less than you invest and past performance isn't a guide to the future.

Susannah Streeter: Yes, this is not advice or a recommendation to buy, sell or hold any investment. No view is given on the present or future value, or price of any investment and investors should form their own view on any proposed investment.

Sarah Coles: This hasn't been prepared in accordance with legal requirements designed to promote the independence of investment research and is considered a marketing communication.

Susannah Streeter: Non-independent research is not subject to FCA rules prohibiting dealing ahead of research, however HL has put controls in place including dealing restrictions, physical and information barriers to manage potential conflicts of interest presented by such dealing.

Sarah Coles: You can see our full non-independent research disclosure on our website for more information. So, all that's left is for me to thank our guests, Peter, Hugh, Sophie, Emma and our producer, Elizabeth Hotson.

Susannah Streeter: Thank you so much for listening. We'll be back again soon, so if you enjoyed the podcast, please do let us know what you think and do subscribe wherever you get your podcasts. You get a fresh new episode in your inbox as soon as it's ready. Goodbye.