Petrol prices rise for sixth straight month with more increases on the way
Petrol prices rose for the sixth month in a row in April, with diesel costs also seeing their fifth consecutive increase.
The latest data from RAC Fuel Watch shows that unleaded was up by almost a penny, with diesel up just over half a penny. While the increases were relatively small, the rise put petrol at its highest price for 15 months and the RAC’s Simon Williams warned activity in the wholesale market was likely to mean even higher forecourt prices.
Unleaded went up 0.89p to an average of 127.19p per litre, with diesel up by 0.62p to 129.73p per litre. This means it now costs £69.95 to fill up a 55-litre family car with petrol and £71.35 for an equivalent-sized diesel.
The country’s “big four” supermarkets - Tesco, Asda, Sainsbury’s and Morrisons - remain the best place to secure cheap fuel, charging an average of 4.5p per litre less for petrol and 4.19p less for diesel. Motorway services continue to charge the most, with both fuels 18p per litre more than the national average.
RAC fuel spokesman Mr Williams said: “April marks six months of rising petrol prices and sadly there’s no end in sight as oil is getting perilously close to $70 a barrel – something we haven’t seen for more than two years. If oil breaks this threshold, it will inevitably spell more bad news for drivers at the pumps."
Why are fuel prices rising?
The Covid pandemic has seen wild fluctuations in the wholesale cost of oil, dropping as low as $25 at one point and causing prices at the pump to drop close to £1 last April, but it has been rising in recent months. The price of a barrel of oil rose by nearly $5 in April to $66.93 and is predicted to reach $70 in coming months.
Demand for oil in general is increasing, with fuel a key part of that as more people return to normal driving habits. However, the major oil producing nations have so far maintained their limit on production - established at the peak of the pandemic - and are predicted to keep this in place in coming months.
Mr Williams added: “It’s very frustrating for drivers that they’re now having to contend with even higher fuel prices just at the point where many will be driving a lot more. But unfortunately, it’s the very fact people are driving more that’s causing petrol prices to go up as demand for oil begins to outpace supply.
“The saving grace is the relative strength of the pound compared to the US dollar. A stronger pound means it costs less to buy for refining into motor fuel. If the value of the pound were to tumble, we’d all be paying much more.
“Progress in the global battle against the coronavirus will be critical in determining where fuel prices go from here. The success of domestic vaccination schemes could lead to greater demand for fuel and in turn rising prices due to global supply restrictions. Ongoing travel restrictions in other countries around the world may also prolong oil output restrictions and force fuel prices in the UK higher still.”