The RAC issued a warning that UK petrol prices might soar far above 150p per litre, after rising by roughly 8p this year.
Rising UK Petrol Prices Spark Concerns
Since the beginning of the year, fuel and diesel prices have risen. It all comes down to the pricing of Brent crude oil, which peaked at $80 per barrel and remained there until February. It has resulted in an average eight-pence increase since January.
Diesel pump prices have in fact risen to an average of 157.5p, the most since November 2023.
RAC fuel price spokesperson Simon Williams stated: “This year is proving to be another tough one for drivers.
“Both petrol and diesel are now the most expensive they’ve been since November last year, which is bad for households, businesses and the economy, especially as we know there is a close link between fuel prices and inflation.
“While diesel is getting close to 160p, this is purely down to retailers taking much bigger margins as there’s only been a few pence between the wholesale prices of both fuels since mid-March.
“We find it hard to believe that a margin of 13p a litre on diesel – compared to the long-term average of 8p – is fair. This surely won’t go unnoticed by the Competition and Markets Authority which only two weeks ago expressed its concern about higher retailer margins.”
RAC's Insights on Retailer Margins and the Impact on Fuel Costs
According to the RAC, retailers may raise their own margins, putting pressure on fuel costs. Profit margins on petrol have declined from 10.5p to 8p per litre this year due to competition authorities' pressure, but Mr Williams believes this might climb again due to factors such as rising staff costs.
"If the average retailer margin on unleaded was to go back up to 10p a litre, the £1.50 mark could be exceeded even at $90 a barrel."
The RAC reports that a litre of unleaded petrol now costs on average 149.25p, up from 140p at the start of this year. It last exceeded 150p per litre in November.