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Petrol prices have risen 7.5p-a-litre since end of December

Petrol prices have risen 7.5p-a-litre since end of December

Motorists will be in for a shock once lockdown eases and they can travel, as the price of petrol and diesel has likely jumped since the last time they

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Motorists will be in for a shock once lockdown eases and they can travel, as the price of petrol and diesel has likely jumped since the last time they visited a filling station.

Analysis of national prices show that unleaded now costs almost 122p-a-lite on average in the UK, which is the highest it has been since the start of March last year.

Unleaded has risen from around 114.5p per litre in December, with the 7.5p rise meaning the average petrol car’s fuel tank is £4.13 more expensive to brim than it was at the end of 2020.

Experts warn that drivers face escalating bills when they return to the road from lockdown, with oil set to surge in value and the possibility of a fuel duty hike on top of the introduction and expansion of emission zones in cities in coming months. 

Drivers in for a post-lockdown shock at the pumps: Motorists are being warned that the cost of fuel is far higher than it was before the current national restrictions were put in place at the beginning of the year

Drivers in for a post-lockdown shock at the pumps: Motorists are being warned that the cost of fuel is far higher than it was before the current national restrictions were put in place at the beginning of the year

Drivers in for a post-lockdown shock at the pumps: Motorists are being warned that the cost of fuel is far higher than it was before the current national restrictions were put in place at the beginning of the year

February’s AA Fuel Price Report shows that average fuel prices on Tuesday this week were 121.84p-a-litre for petrol and 124.91p for diesel. 

A month ago, both had been 3p-a-litre cheaper. And between August and December 2020, petrol was 7.5p per litre less than it is today.

Over the past month, pump price increases across the supermarket and oil company brands have been largely in line with each other, the AA says,

However, it pointed a finger at both Morrisons and Sainsbury’s, which are charging around 1p-a-litre more for fuel than the leading supermarket, Asda.

The main driver in the recent pump-price leap has been oil price surging from $50 a barrel in December to $64 this week – the highest it has been for 13 months.

The price spike is a combination of oil producer cuts and speculation on increased demand with the coronavirus vaccines rollout.

The average price of petrol is now at 121.53p -a-litre, says the AA

The average price of petrol is now at 121.53p -a-litre, says the AA

Diesel has also gone up by around 3p per litre in a month

Diesel has also gone up by around 3p per litre in a month

The average price of petrol is now at 121.53p -a-litre – up from 118.46 a month ago, says the AA. Diesel has also gone up by around 3p per litre in a month. Both have risen by around 7.5p since the end of December

Motoring groups have warned drivers they could face higher bills when they return to the road, with oil prices and a potential increase to fuel duty pushing fuel costs higher

Motoring groups have warned drivers they could face higher bills when they return to the road, with oil prices and a potential increase to fuel duty pushing fuel costs higher

Motoring groups have warned drivers they could face higher bills when they return to the road, with oil prices and a potential increase to fuel duty pushing fuel costs higher

Yet, commodity trading in road fuels has been more guarded, the AA says. 

‘In January of last year, oil at $62 to $64 a barrel led to petrol being traded at around $600 a tonne. This time, commodity petrol is trading at $570 – the $30 difference equivalent to a 2p difference (with VAT) at the pump,’ the motoring group said.

Last week, Platts reported weak fuel demand across Europe with continuing and re-imposed Covid lockdowns.

As a result, the UK’s fuel trade has maintained the higher margins at the pump of last spring when – with tax and wholesale cost deducted from the petrol pump price – retailers were pocketing margins of between 10p and 11p per litre.

Petrol could go up to 130p-a-litre this year and 143p in 2022

Increasing oil prices could push fuel costs to a record high by 2022, the RAC says

Increasing oil prices could push fuel costs to a record high by 2022, the RAC says

Increasing oil prices could push fuel costs to a record high by 2022, the RAC says

The RAC warns that, while it is impossible to predict currency exchange rate changes, there’s a strong likelihood that the cost of oil will increase as a result of global vaccination programmes rolling out and the resulting increase in travel, signalling higher pump prices for UK drivers over the coming months.

Some analysts predicting oil could reach $80-a-barrel this year, a price last seen in October 2018.

The RAC says petrol prices could rise to around 130p and diesel to 134.5p based on today’s exchange rate remaining constant. 

At $100 a barrel – a price that JPMorgan has said is a possibility next year – petrol and diesel could hit records high of 143p and 148p respectively in 2022.

The previous average fuel price highs were seen in April 2012, with unleaded at 142.48p-a-litre and diesel 147.93p.    

Around mid-February in 2019, margins of 8p to 9p-a-litre were the norm. 

And additional costs for drivers looms post-lockdown, as hundreds of thousands of people start to go back to work or have to drive to new jobs further away from the ones they lost in the pandemic. 

Among these is the possible threat on an increase to fuel duty in the Chancellor’s budget statement on 3 March.

There is also likely to be a 1.6 per cent increase in car fuel costs with the introduction of E10 fuel later this year, according to the Government’s impact assessment.

Throw into the mix that councils are hiking the price of parking and residents’ permit and half a million car owners in Birmingham (June) and London (October) face the prospect of being priced off the road by emissions-related city access charges, and motorists could face escalating car ownership bills.

Luke Bosdet, the AA’s fuel price spokesman, said: ‘As they struggle to get their working lives and family finances back on an even keel after Covid, there is going to be a real sense of being under assault for needing to drive a car. 

‘The bonus that the fuel trade is giving itself is just part of the financial pressure likely to be heaped on drivers this year – particularly those on lower incomes.

‘For the growing number of car owners able to afford electric vehicles and dodge many of these threats, there may be much relief as they take to the road – but “don’t look back in anger” will be the one tune they won’t be humming any time soon.’

Simon Williams, fuel price spokesman for the RAC, added: ‘With the Chancellor’s Budget now less than two weeks away, the last thing drivers, and possibly the economy, need is a fuel duty increase – not least as petrol prices have now been rising for 13 consecutive weeks. 

‘A hike in duty at a time of rising fuel prices could put unprecedented pressure on lower-income households and might have the negative effect of forcing everyone who depends on their cars to consider cutting back on other spending.’ 

SAVE MONEY ON MOTORING

This post first appeared on Dailymail.co.uk

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