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Fuel price warning: Sharp rise of 5p a litre predicted

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Author: | Updated: 11 Oct 2016 15:23

The Petrol Retailers Association has warned that fuel prices across the UK could rise by up to five pence per litre over the coming weeks.

The reason for the rise is being put down to a 52-week high price of Brent crude oil, combined with the current weaker buying power of the pound.

Petrol Retailers Association has issued a warning of fuel price increase over the coming weeks.

Brexit: fuel price among biggest worries, survey finds

Brian Madderson, chairman of the Petrol Retailers Association (PRA), warned: "Motorists can expect increases of up to four or five pence per litre (ppl) by the end of the month unless there are favourable corrections to the exchange rate and global oil prices.”

Pound worth less

The sterling’s value tumbled further last week as a result of post-Brexit uncertainty. Because crude oil is purchased in dollars, a weaker pound makes it more expensive for the UK to buy it. The PRA’s warning comes days after the RAC predicted a price increase.

RAC fuel spokesman Simon Williams said: “The unexpectedly sharp fall in the value of the pound will make the wholesale price of fuel go up. Sadly, it’s also happened at a time when the oil price appears to be rising again so the combined effect will be bad news for motorists.”

The current price of unleaded is at its highest since August 2015.

So it isn’t just political measures that are to blame; the price of oil has been spiralling since earlier in the year, with unleaded and diesel prices now at their highest point in over a year.

In its statement, the PRA called on chancellor Philip Hammond to cut fuel excuse duty in his Autumn Statement on 23 November. The association advise that it should be dropped from 57.95ppl to 55ppl to ensure the extra cost of fuel does not affect consumer spending.

Safeguard consumer spending

Commenting on the proposal, Madderson said: “This would be an extremely popular and valuable contribution to ensuring consumer spending does not start to fall away and damage business prospects as the new government grapples with the aftermath of Brexit.”

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