Anyone who drives a diesel car is being warned that prices have shot up for the first time in months – at a faster rate than petrol.
Breakdown experts the RAC have warned drivers that after ‘months of declining pump prices’, tensions in the Middle East have pushed up the price of a barrel of oil, leading to a shock on the forecourt as drivers look to fill up – especially if you drive a diesel.
The RAC in its latest analysis released this week says unleaded petrol has risen by 2p a litre on average, to 134.14p, while diesel went up almost 3p a litre, from 138.39p to 141.2p, adding £1.55 to the average family car’s fill-up cost in a matter of weeks.
RAC fuel spokesperson Simon Williams said: “The arrival of summer has brought some wholly unwelcome increases to pump prices, with retailers wasting no time in putting them up following increased tensions in the Middle East. Unleaded and diesel are now both at their highest levels since late April, although we see no reason for further increases as wholesale prices have come back down again.
“July will be a telling month – will retailers halt further price rises, or even cut them if wholesale costs continue to slide? Or will drivers be stuck having to pay an elevated amount for the foreseeable future? This is particularly topical given it was only two days ago that the Competition and Markets Authority noted how weak competition within the fuel retailing market is.”
The RAC said that the primary cause of drivers paying more at the pumps was the cost of a barrel of oil jumping from around $64 in late May to a high of almost $79 on June 19, following escalating tensions between Israel and Iran. Fears that Iran – one of the world’s biggest oil-producing nations – might block oil exports along the Strait of Hormuz on its southern coast injected uncertainty into the market, pushing oil prices up.
But the oil price has since fallen and ended the month at $67, only a few dollars more than it was at the start of June.
The RAC says it hopes that pump prices will now stabilise, meaning drivers don’t see any further immediate increases at forecourts this month, but it hinges on the level of margin retailers decide to take on the fuel they sell to drivers.
Mr Williams added: “Thankfully, we’re a long way off the record pump prices of exactly three years ago – when the Russia/Ukraine conflict saw the average price of unleaded hit an unprecedented 191.53p a litre and diesel climb to 199.21p, with some retailers charging well in excess of £2 a litre.
“But given fuel represents a substantial chunk of most households’ monthly outgoings, it remains the case that drivers need to be guaranteed a fair deal every time they fill up. The creation of a government-backed Fuel Finder scheme by the end of this year should make it easier to find the cheapest forecourts. But just because the price is cheaper depending on where you buy it doesn’t mean it’s as low as it could be. That depends on retailers more accurately reflecting wholesale price drops and ending so-called ‘rocket-and-feather’ pricing.”