Fuel prices still volatile despite recent respite
June brought some relief from rising fuel prices but the outlook for July remains uncertain, according the RAC.
The organisation’s Fuel Watch data shows that petrol fell from 129.37p a litre across the UK to 127.59p after the supermarkets cut their prices in response to lower wholesale costs. Diesel also reduced but only by 1.5p a litre from 132.32p to 130.74p.
The greatest price reductions were seen across UK supermarkets, where an average of 2.4p came off the price of a litre of unleaded, and 2p off a litre of diesel. In contrast, there was no reduction at motorway services fuel stations – with a litre of petrol remaining at 145p and diesel at 148p per litre.
However, wholesale prices started to creep up again at the very end of last month, eliminating the possibility of petrol and diesel prices becoming any cheaper through the start of July.
RAC fuel spokesman Simon Williams said: “We remain in a period of real volatility when it comes to fuel prices. Late in June, OPEC agreed to increase global oil production. While this would normally signal cheaper oil, and in turn cheaper fuel prices, other factors have been at play – namely an escalating trade dispute between the United States and other major countries and the prospect of renewed sanctions placed on another oil-producing nation, Iran. At the same time, the pound remains comparatively weak against the US dollar.”
In response to reports that the Government is considering ending the fuel duty freeze, Williams added: “Aside from the fact that petrol and diesel in the UK are subject to some of the highest levels of taxation anywhere in Europe, it is also the case that the fuels are at their highest prices for more than three years. With a significantly weaker pound, it would only take a few further oil prices rises this year to see prices start to rocket.”
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