UK fuel prices continue to edge higher

UK fuel prices continue to edge higher
The second-largest weekly fuel price increase of the year means UK motorists are now paying 120p a litre for diesel.

Over the course of last week alone the average cost of a litre of both petrol and diesel rose by 1.2p, leaving drivers paying 118p for unleaded on the nation’s forecourts.

The RAC concedes motorists face the likelihood of a third straight month of increases, with pump prices surpassing an average not seen since March.

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Recent surges in the price of fuel are being aided in no small part by the devastation brought about by Storm Harvey and the debilitating effect it had on Gulf Coast oil refinery production in the US.

Last week the latest RAC Fuel Watch report confirmed that prices at the pump shot up by more than 2p a litre in August, and warned drivers that these rises are likely to be just the “tip of the iceberg”.

Unleaded went up by 2.26p a litre while diesel was 2.28p a litre more by the end of the month.

Now the price rises have escalated again, with data published by the Department for Business, Energy and Industrial Strategy putting them at a four-month high.

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RAC fuel spokesman Simon Williams said: “The average price is now back to 119p, something motorists last saw in late March. Diesel has also gone up and just yesterday rose above the 120p a litre mark for the first time since early May.

“This is bad news for drivers who have had two consecutive months of pump price rises and now face a third.

“On a more positive note the wholesale price of unleaded dropped yesterday so this may bring some much-needed relief on the forecourt. This is as a result of the damage to the oil infrastructure in Texas caused by Storm Harvey proving to be less extensive than had been feared and the fact many refineries are now coming back online.

“While the price of producing petrol tends to be primarily affected by the cost of crude oil and the exchange rate as it’s traded in dollars, it is also affected by global market forces for the refined product itself and we often see the price move up and down according to supply and demand issues.

“This is what happened after Storm Harvey as petrol went into shorter supply. It was also compounded by a drop in the region’s crude oil production.”

Copyright Press Association 2017. Motoring News articles do not reflect the RAC's views unless clearly stated.