Ukraine unrest to cause fuel price hike, warns RAC
The organisation says that fuel traders have already begun to buy up stocks to guard against being caught out in the event of the situation worsening, which automatically causes prices to increase due to a tightening in supply. It adds that the price of oil will almost certainly be negatively affected by the unrest, further increasing fuel costs and, in turn, forecourt prices.
British motorists have enjoyed more than a month of the lowest average pump prices for three years, with petrol below 130p a litre. The low forecourt prices were a result of fuel retailers passing on savings in the wholesale price that had eased in mid-January to around 100p a litre for petrol and 129p for diesel.
However, even before the appearance of Russian troops in Ukraine, wholesale prices had begun to rise again as a result of the pound losing ground against the dollar (despite it being around 12% stronger than it was a year ago) and oil stocks declining, thereby causing prices to rise.
RAC head of external affairs Pete Williams said: ‘While savings were only small, at 129p a litre the price was 11p cheaper than it was in early March last year which meant a saving of around £6 on a tank of petrol for an average family car like a Ford Focus and £5 for a tank of diesel.
‘The tensions in Ukraine, brought about by Russia’s unprecedented move, will unfortunately affect everyone driving a vehicle in the UK as the fuel market is intrinsically linked to major international political events. While we can all only hope for a speedy resolution to this situation, from a motorists’ perspective we really need the pound to continue performing well against the dollar as this could help to offset some of the inevitable price rises.’