Motorists can expect to see the average price of fuel reach new record highs before the month is out, the Petrol Retailers Association has warned today.
Chairman Brian Madderson said the existing records of 142p per litre for petrol and 148p for diesel set in April 2012 are ‘almost certain’ to be eclipsed before the end of October.
The PRA says the average price of unleaded on Tuesday was 141.35p-a-litre, while diesel was at 144.84p with the surging cost of oil – rather than the recent spate of panic buying – pushing prices higher.
Record high fuel prices predicted for October: The Petrol Retailers Association says petrol and diesel pump prices are ‘almost certain’ to exceed existing records before the end of October
Madderson says the primary reason for predicted record high pump prices in October is the rise in crude oil costs, which recently hit $85 a barrel for Brent Crude – 50 per cent higher than it was in January.
This has been caused by a ‘cutback in production from OPEC countries and Russia at the same time as the global economies are staging a rapid economic turnaround from the global pandemic’.
Motorists have recently been told to expect forecourt prices to soar in the run-up to Christmas, with some analysts expecting oil price rises to hit $100-a-barrel before the end of 2021.
Mr Madderson, whose organisation represents independent fuel operators in the UK, said: ‘Current average pump prices across the UK are being softened by some of the largest retailers who typically benefit from a three or even four-week lag to their delivered fuel prices.
PRA Chairman Brian Madderson (pictured) says the primary reason for a predicted record high pump prices in October is the rise in crude oil costs, which recently hit $85 a barrel for Brent Crude – 50% higher than it was in January
‘Only last week, two major grocery retailers in Belfast were vying for business by offering fuel at below standard wholesale cost with pump prices as low as 125.9p for a litre of petrol and 130.9p for diesel.’
The PRA’s warning comes after the Department for Business, Energy and Industrial Strategy said that the average petrol price of petrol had hit a a nine-year high of 135.9p on Monday.
Chancellor Rishi Sunak has been urged by backbenchers to refrain from hiking fuel duty at next week’s Budget with motorists already set to pay more than ever before to fill up.
Prices have risen by more than 26p per litre in the past 12 months, adding £14 to the cost of filling up a typical 55-litre family car.
The RAC has attributed rising petrol prices to several factors, including the increase in the cost of oil, September’s switch to E10 petrol and the impact of VAT.
It does not believe the recent panic buying of fuel contributed to price increases.
Meanwhile the average price of a litre of diesel on Monday was 143.19p, up by more than 2.5p from a week earlier.
Panic-buying of fuel swept across the country at the end of last month amid fears of shortages.
Many workers were faced with huge queues at petrol stations, closed forecourts or left with an empty tank, a report from last week revealed.
A survey of almost 450 adults by human resources firm Randstad found one in six said they cannot get to work unless they can use public transport, cycle or walk because of the shortages.
Around one in 20 also said they had gone to their office to avoid racking up a hefty gas bill at home amid rising heating costs.
Commenting earlier this week, RAC fuel spokesman Simon Williams said: ‘Our data shows we haven’t seen the petrol price at this sort of level since September 2012, and we’re now worryingly close to the all-time average UK price high of 142.48p that was hit in the same year.
‘At a time when households and businesses are facing spiralling prices in other areas this is a huge concern.
‘With just two weeks to go until COP26, the uncomfortable truth for the Government is that petrol prices are now reaching unprecedented levels and, along with rising domestic energy prices, will be putting a huge financial strain on households that depend on their vehicles and, in turn, the economy.
Panic-buying of fuel swept across the country at the end of last month amid fears of shortages
‘We call on the Government to take action and do whatever it can to help ease the burden on drivers.
‘While the cost of oil has more than doubled in a year, the price drivers pay at the forecourt is compounded by the fact there is nearly 58p in fuel duty charged on every litre. And, on top of the delivery cost and the retailer’s margin, you’ve then got VAT which currently accounts for 23p a litre – this has added 4p more a litre in just a year.
‘For these reasons, it might be most effective for the Government to consider temporarily cutting the level of VAT on motor fuel to help hard-pressed drivers.
‘While there have been calls for fuel duty to be cut in the past, there is a real risk that any such cut could be swallowed up by retailers rather than benefiting drivers.
‘As VAT is charged on the final cost at the pumps, drivers would see the benefit immediately.’
SAVE MONEY ON MOTORING
Some links in this article may be affiliate links. If you click on them we may earn a small commission. That helps us fund This Is Money, and keep it free to use. We do not write articles to promote products. We do not allow any commercial relationship to affect our editorial independence.