According to the RAC, petrol prices are at an eight year high following nine consecutive months of increases, as rising oil prices push up fuel costs.
The average price of a litre of petrol is now as much as 135.13p, which is a level not reached since September 2013. Meanwhile, diesel is at its highest price since 2014, now costing an average of 137.06p a litre.
A spokesman from the RAC says the only way prices are going at the moment is up. But that isn’t what drivers want to see.
Fuel Watch figures show that last month was the most expensive July to fill up since 2013 for petrol, and 2014 for diesel. July had the biggest increase in the price of unleaded petrol since January, with 3.4p added to the cost of a litre. Meanwhile, diesel climbed another 2.7p a litre in that month.
As an example, drivers filling up a 55-litre tank with petrol pay an average of £3.08 more now than at the beginning of June, and £11.47 above last year. A similar sized tank now costs £2.90 more to fill with diesel than at the beginning of June, and £10.46 more than a year ago.
This could prove costly to families who are using their cars to travel more this summer as they holiday in the UK rather than go abroad.
Will prices continue to rise?
Simon Williams from the RAC doesn’t think prices will fall anytime soon. He predicts a global economic recovery will see trade pick up, increasing demand for oil. As demand grows, supply may not be able to keep up, pushing up wholesale fuel prices. This then has a knock-on effect for motorists.
Although we have not yet seen the back of the pandemic, economic activity is picking up again as restrictions and rules change and ease around the world. Demand for oil is likely to continue to increase, which will push wholesale fuel prices up. Mr Williams says, “retailers are bound to pass [the increases] on at the pumps”.
He warns that prices could climb even higher by the end of summer, unless major oil-producing nations create new strategies to increase output.
The highest ever petrol prices seen in the UK were in April 2012, when unleaded petrol peaked at 142p a litre and diesel at 148p. Despite all the recent increases, we have not reached that level yet. Brian Madderson, chairman of the Petrol Retailers Association, says we are “still some way off” that happening.
Meanwhile, indications are that oil price is coming back a little due to “concerns that China may be going into an economic slowdown”. If that is the case, it could help bring down demand, meaning wholesale prices can reel back, and forecourts will follow on.
However, despite his optimism, Mr Madderson warns that the situation is “on a knife-edge at the moment”, with “summer often the time of the year when there is significant maintenance work in the refineries, which restricts output”.
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