Soaring fuel prices see biggest weekly rise for more than five years

Soaring fuel prices see biggest weekly rise for more than five years
The dramatic fall in the value of the pound has been blamed for causing the biggest weekly rise in fuel prices for more than five years.

Official figures from the Department for Business, Energy and Industrial Strategy reveal that the average price of petrol shot up by 1.22% in just seven days.

This is the biggest weekly percentage increase since January 2011, analysis shows.

Drivers are currently being charged 113.72p per litre to fill up their cars – the highest price since August last year.

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Diesel has also seen its largest percentage weekly rise since January 2011 after going up by 1.39% to hit 116p per litre.

According to the RAC, the dramatic price rises have been brought on by a “perfect storm” that is creating an “ominous” future for motorists.

“The plummeting pound, combined with a rising oil price as a result of indications that Opec and possibly Russia will agree a cut in oil production in November, are driving wholesale prices up,” RAC fuel spokesman Simon Williams said.

“However, it is the flash crash of the pound that took place on October 7 which has been the major factor in the sheer speed of the average price increases as fuel is traded in US dollars.

“This has led to the average fuel price rising 3p per litre in three weeks.”

Mr Williams said the increase in prices should make the Treasury “think again” if it is considering raising fuel duty in next month's Autumn Statement.

He added: “The present situation underlines just how rapidly things can change.”

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Sterling fell below the $1.22 mark against the dollar this week to $1.217.

But HSBC has predicted the pound will drop below $1.10 against the dollar by the end of 2017 as fears and uncertainty surrounding Brexit intensify.

It comes after a landmark agreement between the world’s major oil-producing countries to cut production of crude oil.

This has led to a rise of $6 in the price of a barrel of oil to $50 – the first time since June that the figure has been so high.

According to RAC Fuel Watch, this meant that motorists were already paying more at the pumps at the end of last month.

The data showed that a litre of diesel rose by 42p to hit the highest average cost since August 2015 – 113.34p.

Meanwhile, average petrol prices were also up by 0.48p to 112.07p, just short of the 2016 peak of 112.33p.

Copyright Press Association 2016. Motoring News articles do not reflect the RAC's views unless clearly stated.