Petrol price above 150p a litre for first time in nearly two years

Fuel prices have climbed to new heights, with the average cost of petrol surpassing 150p per litre for the first time since May 2024. Diesel prices have also increased, reaching over 177p per litre, shortly after a series of US and Israeli attacks targeted Iran. These developments come amid ongoing regional tensions that continue to influence global energy markets.

According to the latest data from the RAC, the conflict in the Middle East is driving fuel costs upward, though prices remain lower than the record levels experienced following Russia’s invasion of Ukraine. Wholesale prices for Brent Crude oil recently rose above $110 per barrel, despite announcements from the US President delaying planned strikes on Iranian energy facilities by an additional ten days. The RAC described the recent rise in fuel costs as an “unwelcome milestone,” with unleaded petrol now 17p more expensive per litre than before the conflict started and diesel up by 35p.

RAC policy chief Simon Williams highlighted the impact on consumers, noting, “With the long-awaited four-day Easter weekend almost within touching distance, the cost of getting away by car is going to be noticeably higher this year.” Drivers have been advised to carefully consider where they fill up their vehicles and use price comparison apps to find the best deals. Fluctuations in wholesale oil prices over the past month—ranging between $73 and $116 a barrel—reflect uncertainty among traders about the future stability of oil supply from the Middle East.

Despite positive diplomatic signals, such as the US President stating that talks with Iran were progressing “very well” and postponing military action until early April, experts like Russ Mould, investment director at AJ Bell, observe disconnects between the messages coming from Washington and Tehran. Meanwhile, the increase in wholesale oil prices typically results in a lagged rise at the pump. Industry analysis suggests that each $10 rise in oil price adds about 7p per litre to retail petrol prices. Meanwhile, Asda’s executive chairman Allan Leighton reported that some petrol pumps at their stations experienced temporary outages due to higher-than-expected demand linked to price volatility, though no forecourts have been closed. Leighton also dismissed accusations that fuel retailers are exploiting the situation for profit, pointing out that Asda’s margins have actually decreased amidst the price surge.

The Petrol Retailers Association confirmed that the supply status among its members has been “stable,” with ongoing collaboration between industry and government to monitor stock levels and deliveries. Government concerns about potential profiteering have been met with skepticism from retailers, who emphasize the substantial taxes already embedded in fuel costs. The situation has caused disruptions beyond pricing, including reports of truck drivers and motorists stranded and businesses facing challenges due to rising operational expenses. In response, leaders are convening emergency meetings to address the escalating impact and seek coordinated solutions

Read the full article from The BBC here: Read More