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Fleets face fuel price increase

Date: 15 May 2018   |   Author: Sean Keywood

The cost of petrol and diesel has shot up to the highest level seen for several years - and worse could follow. Sean Keywood reports.

Fuel prices increased during April by the largest amount in 16 months, to the highest prices seen since 2014.

Data from the RAC shows that the average price of petrol went up by 2.74p, to 123.20p, while the average price of diesel rose by 2.94p a litre, from 123.08p to 126.02p.

The RAC said the last time such a sharp increase was seen was in December 2016, with rising oil prices to blame.

The last time the average price of petrol was as expensive at it is now was in mid-November 2014, while diesel last exceeded 126p a litre on 1 December 2014.

RAC spokesman Simon Williams said, "A 12% surge in the price of oil has cost motorists dear in April.

"A 3p a litre rise at the pumps is, fortunately, fairly unusual, but it's definitely bad news as it means drivers are now paying 8p more a litre than they did last summer.

"The cost of filling up an average family-sized 55-litre car with petrol is now nearly £68, which is £4.50 more expensive than it was last July. For diesel car drivers, it's even worse, with a tank costing over £69, which is £5.50 more."

Williams said that supermarket fuel prices, in particular, offered evidence of the effect of rising oil costs, having seen particularly big increases.

He said, "The dramatic rise in the price of oil and its knock-on effect on the cost of fuel is clearly demonstrated by the fact that the four big supermarkets, which sell the largest volumes and therefore buy fuel in more quickly than other retailers, have raised their prices even more steeply. 

"A litre of supermarket petrol went up 3.2p to 120.17p, and diesel by 3.3p to 123p, signifying they are quickly passing on increased wholesale costs to motorists."

Williams warned that further price rises could still be around the corner, because of uncertainty over global oil supplies with the US set to reimpose economic sanctions on Iran. 

"Unfortunately, the price of oil gained $8 in April, driven by a combination of international issues, all of which could negatively affect global supply," he said.

"The biggest of these is the fear that the US could reimpose crippling economic sanctions on Iran - the third-largest oil producer in OPEC - over its controversial nuclear energy programme which it has been limiting as agreed with six world powers, including the US and the UK.

"The outlook for fuel prices is not good at the moment, as the oil price is well over $70 a barrel, and if the US does try to reimpose sanctions on Iran and supply drops, motorists will end up paying far more at the pumps."

Williams said the RAC expected prices to rise further by around 1p a litre, but that this could quickly get worse if oil prices increased or the value of the pound fell. On a regional level, Northern Ireland saw the biggest increase in petrol prices during April, with a 3.47p rise from being the cheapest in the UK at 119.47p a litre to a more typical 122.94p.

The West Midlands saw the smallest increase at 2.38p, to 122.68p. The south-east of England remained the most expensive place to buy petrol, with a litre costing 124.05p at the end of April.

Motorists in Scotland saw the biggest rise in diesel prices, by 3.16p to 126.06p. Northern Ireland had the cheapest diesel at 125p a litre, while the most expensive was in the south-east at 126.79p a litre.

Motorway fuel prices saw lower increases than elsewhere, with a litre of petrol costing 138.43p - a rise of 0.34p - and diesel 141.11p - a rise of 1.13p. 

However, this still meant both fuels were more than 15p a litre more expensive on motorways than the UK average.