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Fuel prices struck by ‘perfect storm’

The RAC is calling on the Chancellor not to raise fuel duty in next month’s Autumn Statement as it reports ‘a perfect storm’ adversely affecting fuel prices.

Man at fuel pump

The RAC says the plummeting pound, combined with a rising oil price as a result of indications of a cut in oil production, is driving wholesale prices up

The average fuel price has risen 3p per litre in the last three weeks, attributed by the RAC to the plummeting pound, combined with a rising oil price in response to a possible oil production cut.

RAC fuel spokesman Simon Williams added: “However, it is the ‘flash crash’ of the pound that took place on 7 October which has been the major factor in the sheer speed of the average price increases as fuel is traded in US dollars. This has led to the average fuel price rising 3p per litre in three weeks.

“Analysis by the Press Association shows that prices last rose this quickly at the start of 2011 – less than four months later, the then Chancellor George Osborne took the step of cutting fuel duty by 1p to 57.95p. While the situation in 2016 is quite different to five years ago, with average pump prices some 20p per litre less today, the outlook all of a sudden looks far more ominous.”

Williams also said the current uncertainty should make the Chancellor think again about any possible plans to raise duty in the Autumn Statement: “The present situation underlines just how rapidly things can change: just eight months ago average petrol prices were around 102p per litre but now they are heading to 116p.”

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Natalie Middleton

Natalie has worked as a fleet journalist for 16 years, previously as assistant editor on the former Company Car magazine before joining Fleet World in 2006. Prior to this, she worked on a range of B2B titles, including Insurance Age and Insurance Day. As Business Editor, Natalie ensures the group websites and newsletters are updated with the latest news.