Petrol and diesel prices soar as oil price nudges $100 a barrel

Drivers are facing another round of rocketing fuel prices, with diesel soaring by 8p per litre last month, on top of a similar 8p rise in August. Petrol rose by 4.5p per litre last month, and 7p in August, with RAC Fuel Watch once again pointing to unfair overpricing on the forecourts.

“Our analysis of wholesale and retail data shows that petrol is currently overpriced by around 7p a litre, although the price of diesel is likely to go up further still in the coming weeks,” says RAC fuel spokesman Simon Williams.

The RAC says it’s “worrying” that wholesale price changes aren’t being reflected fairly on supermarket and other filling station forecourts, in spite of the big four supermarkets being hauled over the coals by the Competitions and Market Authority for overcharging motorists to the tune of £900m in 2022.

“In the last two weeks the wholesale cost of diesel has become 10p a litre more expensive than petrol, yet the gap at the pumps is only 5p,” says Williams. “If retailers as a whole were playing fair with drivers, petrol would be at least 7p cheaper than it is now, down to around 150p from its current average of 157p.”

According to the RAC, this demonstrates the need for a price monitoring body that was recommended by the CMA report: “The setting up of this body cannot come soon enough, as long as it has some form of teeth to keep retailers in line,” says the RAC spokesman.

Aside from retailers boosting margins, upwards pressure on prices is primarily coming from a decision by oil producing states within the OPEC+ group - which includes Saudi Arabia and Russia - to reduce output and try to restrict global supplies of oil. During September the price of a barrel of oil on the global market rose from $89 to $96 - close to its $100+ price of just over a year ago.

There could be a glimmer of light on the horizon for hard-pressed drivers, though, as analysts at US bank Citigroup have forecast barrel prices could fall to $70 in 2024, due to the sluggish world economy - and the fact that “peak transport demand” is looming.

“Demand looks constrained as the pandemic recovery factors continue to ease off and peak transport fuel demand looms, while supply is growing in non-OPEC+ suppliers,” Citibank’s head of commodities research Ed Morse has predicted.

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