Last month it was revealed that fuel prices could rise by as much as 5p per litre due to the fall in the pound and rising cost of oil, and today new figures have confirmed the price of petrol and diesel rose in October to their highest level in years.
The figures from the RAC show that the average price of a litre of petrol rose by 4.37p last month to 116.73p – the biggest single month increase since February 2013,
The price of diesel rose even more – by 5.17p a litre to 118.65p – the biggest increase since May 2008.
With the Autumn Statement coming up on 23 November, campaigners are calling on the Chancellor Philip Hammond to announce a cut in the levy by as much as 3p per litre in order to help businesses and households.
Due to the rise in fuel costs at the pumps the cost of filling up a standard family car with petrol has rose by £8.10 in the past eight months, with the cost of filling a tank of diesel increasing by £9.70.
The increase in prices has been put down to the ‘double-whammy’ of the falling pound since Brexit, as well as the rise of oil prices across the globe.
As oil is priced in dollars, the slump in sterling against the dollar has added even more to the wholesale cost of petrol and diesel – costs which as always are passed on to the consumer.
Amid all the doom and gloom though, the RAC have suggested their could be some respite from the rising costs as the price of oil has started to fall in recent weeks.
The cost of a barrel of Brent crude oil cost an average of £50 throughout October, but is now well under £50 as of the start of November.
Speaking about the new fuel price figures, the RAC’s Simon Williams said that October 2016 was “an historic month for UK pump prices for all the wrong reasons”. He said:
“The effects of the weak pound have really been felt on the wholesale market, and this, combined with an oil price at nearly double its lowest level in 2016, has put significant upward pressure on wholesale fuel prices.
“Retailers have had no choice but to reflect these dramatic increases in the prices they charge at the pumps.
“We are a long way from the remarkably low fuel prices enjoyed by families and businesses early in 2016, when the average price of unleaded was around 102p per litre and diesel was 101p.
“But while the pound remains in the doldrums, and with few expecting it to recover in the near future, there are some indications that November might not shape up so badly.”
One of the reasons for cautious optimism is that a decision on a change of strategy by oil industry body OPEC is due to be announced soon. Williams added:
“OPEC, which represents some of the world’s biggest oil producers, recently agreed in principle a cut in production.
“This would mark a move away from the over-production strategy that they have employed for so long, and mere talk of a cut has been enough to force oil prices higher.
“But a final deal is still to be agreed at an OPEC meeting at the end of this month and, with some analysts suggesting a deal might yet stall, this leaves open the prospect oil prices might stabilise or even fall before the end of the year.”
Whatever OPEC’s decision is, there remain calls for Philip Hammond to cut fuel duty for the first time in six years in the Autumn Statement later this month.