An increase in the price of oil has been reflected in the price of both diesel and petrol at the pump, according to analysis by the RAC.
Prices had been falling recently, with diesel down from 163p per litre in October 2023 to 148p in January. Petrol similarly dropped, going from 157p to 140p over the same timeframe.
However, recently oil prices have increased again, and have been trading over $80 per barrel for the past month. This has been reflected in the increased pump prices.
The increase is a significant one. Unleaded petrol has risen by 3.2p from 140.2p on 29 January to 143.4p on 18 February and diesel has increased 4p, from 148p to 152p in the same period. This price hike will add several pounds onto the cost of filling up a tank of fuel.
RAC fuel spokesman Simon Williams said:
“News that fuel prices have bottomed out and are now on the rise again is bad news for drivers, and possibly the economy and future inflation rates, too.
“While we’re not expecting prices to shoot up dramatically, it appears that oil is trading up, which in the absence of a stronger pound, means wholesale fuel costs more for retailers to buy in. The result is higher prices at the pump and more expense for the every-day driver.”
He added that there were several causes for the increase in price, including global refinery maintenance closures, the start of America’s driving season, and UK retailers buying more fuel stocks ahead of the Budget.
Prices are not expected to increase much more, but a lot depends on the profit margin that the retailers choose to set. Supermarket margins remain high, though they have fallen since January.
Simon Williams suggested that “If a ‘new normal’ supermarket margin were to settle around 7p, drivers would get a fairer deal. Last year, RAC data shows they benefitted from an average mark-up of 10p on every litre of fuel sold as opposed to just under 6p in 2019.”
