Petrol and diesel increase could be short-lived

The cost of a barrel of oil has trebled from a low of $13.21 in April to around $42 a barrel today, pushing up pump prices across the UK from the record lows seen during the coronavirus crisis.

New data from RAC Fuel Watch shows that in July the average price diesel rose by 2.95p a litre – from 115.09p to 118.04p – making it £1.62p more expensive to fill-up.

Unleaded rose 3.21p a litre from 111.06p to 114.27p, which sent the cost of a 55-litre tank to £62.85 – an increase of £1.77.

The price of oil was actually stable throughout July, finishing at $42.95 a barrel very similar to the beginning of the month.

The wholesale price of petrol fell 2p across the month to 84.66p a litre, signalling that retailers should be reducing their pump prices slightly in the next week or two. Diesel also came down but only very slightly (0.22p) to 87.39p.

RAC fuel spokesman Simon Williams says petrol is now 7p a litre more expensive than it was at the end of May and diesel is 6p more.

“The higher prices at the pump have been driven by the cost of oil increasing steadily to around $42 a barrel from a low of $13.21 in April,” he explained.

“But drivers may well be given some respite as oil producers are planning on ramping up production despite the risk of renewed lockdowns around the world.

“This could easily lead to supply outstripping demand and therefore a reduction on the forecourts of the UK.

“As it there is some scope for retailers to already be reducing their prices. If they play fair with drivers, we ought to see 2p a litre come off the price of unleaded and nearer 4p come off diesel.”

Looking at the big four supermarkets during July, the average price of a litre of petrol increased by nearly 3.5p (3.43p) to 109.14p and diesel by 3.33p to 113.52p – this means refuelling at supermarket is an average of 5p a litre cheaper for unleaded and 4.5p for diesel.

Asda offered the cheapest supermarket unleaded by the end of July at 108.63p (up 2p) with the others all averaging just over 109p a litre. It also had the lowest price diesel at 112.68p ahead of Sainsbury’s on 113.39p – Morrisons and Tesco were both at 114p.

Regional fuel price variation

Regional average unleaded pump prices

Regional average diesel pump prices