Motorists 'in for a hard time at the pumps' as oil prices surge

Sky news - Business

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Motorists are being warned of rising fuel costs as global oil prices reach a 10-month high.

Petrol prices have already reached the highest UK average since December last year at 155.5p a litre - and they are 10p more than the beginning of August.

The RAC said that production cuts by Saudi Arabia and Russia, and an increased demand from China, have resulted in the spike in costs, meaning drivers will be "in for a hard time at the pumps".

Brent crude, the benchmark for oil prices, ended Monday at $94 a barrel - its highest price since November 2022.

Before the start of this month, the highest oil price in 2023 was $88 in January.

RAC fuel spokesman Simon Williams said diesel was set to jump in price from its current average of 159p a litre to more than 170p.

But he said "the situation with petrol is different", warning that "prices on the forecourt are actually too high due to retailers taking bigger margins than normal".

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'Supermarkets driving up fuel prices'

"If they were playing fair with drivers, they would be reducing their prices rather than putting them up," Mr Williams said.

"However, if oil were to hit 100 US dollars, it should really only take the average petrol price up by another 2p.

"But if retailers remain intent on making more money per litre with increased margins then this could be closer to 160p."

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Analysts also warn that rising global oil prices could impact inflation, with forecasts saying the UK economy will have the highest inflation rate among the world's richest nations this year.

In June 2022, average petrol prices reached a "frightening" new record high of 177.9p a litre, with the average cost to fill a 55-litre family car with unleaded petrol almost £98, according to the RAC

Then-Energy Secretary Grant Shapps held talks with key supermarket and fuel firm bosses in July over "sky high" fuel prices, and vowed to tell them "enough is enough".

This came after the Competition and Markets Authority found increased supermarket profit margins led to drivers paying an extra 6p per litre for fuel last year.

A Department for Energy Security and Net Zero spokesperson said: "We have been clear with fuel retailers that pricing needs to be fair and more transparent for UK motorists.

"Soon, all fuel retailers will have to release their prices by law, and this will help motorists find the best prices.

"We welcome the news that 12 fuel retailers have now signed up voluntarily to share their prices every day and we encourage customers to find their most recent prices through comparison apps and websites - and we encourage all price comparison sites to take this up."