Fuel prices accelerate

The average price of a litre of petrol and diesel continues its voracious rise.

In September the rises mean a tank full is £12 more expensive than a year ago, according to new RAC Fuel Watch data.

Unleaded increased by 1.5p to 136.83p while diesel rose by 2.5p to 139.25p, making the price of petrol 22p a litre more expensive than a year ago (114.61p 30 September 2020) and diesel 21p dearer (118.10p).

Tanked

RAC says both fuels are at prices last seen eight years ago in autumn 2013. Petrol is now just 5.65p off the all-time high of 142.48p and diesel 8.68p off the record of 147.93p.

However, none of this can be linked with the UK’s fuel delivery crisis. This has itself seen some opportunist forecourts up their prices as demand outstrips supply. Instead there has been a 10.65% increase in the price of a barrel of oil on international markets from $71.29 to $78.88 throughout September.

Long covid

As the world wales up after various pandemic shut downs across the industrial globe, demand is outstripping supply. In fact, uring th height of the pandemic, oil producers were as good as giving barrels of oil away, so low was demand. With oil production not capable of changing outputs easily, their was a huge surplus to need. Now the jolt back to normal industry production levels, supplying the heightened levels of demand is difficult in our ‘just in time’ business culture.

Fuel spokesman at the RAC, Simon Williams, says “demand for oil is outpacing supply, and with producer group OPEC+ deciding on Monday not to release more oil”. Whilst there is undoubtedly some thoughts on capitalising on the demand levels through higher crude prices, the oil producers do not want to increase demand which will undoubtedly lead to surplus in a few months when demand returns to normal levels. This would then undermine price in the opposite direction with oil producers left counting the bill. The price of barrel has now broken through the $80-mark for the first time in more than three years.

“This looks likely to spell further misery for drivers at the pumps as we head towards Christmas,” says Williams. “Some analysts are predicting the price could even hit $90 before the end of the year.

“If this were to happen, we could see the average price of unleaded hit a new record of around 143p per litre. Diesel would shoot up to 145p”.

Supermarket sweep

The RAC said prices at four major supermarkets were 4p a litre cheaper than the UK average. At motorway services they were 15p more expensive for petrol at 151.55p and 156.35p for diesel.

Asda sold the cheapest unleaded at 132p, while Sainsbury’s offered the lowest price diesel at 134.28p.

Williams says its been a difficult time for motorists with price rises and now supply shortages. Cases of forecourts exploiting the the supply crisis have been “few and far between, with most retailers acting responsibly”. As supply improves, motorists will increasingly become concerned about “just how much a fill-up is costing them”.

“Drivers in London and South East will undoubtedly feel particularly hard done by as they are still experiencing problems with getting hold of fuel while also paying the highest prices in the UK.”

Regional pump prices