Petroleum prices have surged to record levels due to the ongoing conflict in Iran, prompting the RAC to issue a caution about potential future hikes.
The current average price for unleaded petrol stands at 158.52p per litre, surpassing the previous peak of 158.31p per litre seen on April 15. After a slight decrease until early May, petrol prices began climbing once again.
The spike in Brent crude oil prices since the outbreak of tensions in the Middle East at the end of February has directly contributed to the sharp increase in both petrol and diesel costs.
The RAC has projected that unleaded petrol could climb to a minimum of 160p per litre unless there is a significant drop in oil prices. As of Tuesday, Brent crude was hovering around $110 per barrel.
Simon Williams, RAC’s head of policy, expressed concerns that unleaded petrol prices are likely to continue rising to 160p per litre in the upcoming weeks unless there is a substantial and sustained reduction in the cost of oil, which has remained above $100 per barrel since late April.
While the average diesel price has notably decreased from its peak in early April, currently resting at 185.92p per litre, the RAC emphasized that it should be even lower. The organization urged fuel retailers to reflect the cost savings they are benefitting from in their pricing at the pumps.
A recent investigation by the Competition and Markets Authority (CMA) revealed that the surge in fuel prices is primarily driven by the escalating cost of oil rather than retailers increasing their profit margins. The CMA noted that the pricing gap between what retailers pay for fuel and what they charge consumers has remained relatively stable since the conflict began.
Despite this, the CMA identified heightened fuel margins for a minority of retailers in March and committed to further scrutiny in this area. Sarah Cardell, the CMA’s chief executive, highlighted the pressure that rising fuel prices are placing on households and businesses in the UK, emphasizing the importance of ensuring that any cost reductions are swiftly passed on to motorists.
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