Iran war fuel price surge slows but new data shows drivers were panic buying
The rate of increase in petrol and diesel prices is almost half what it was last week, but it remains unclear when prices will begin to fall
Fuel price increases are beginning to slow as the fragile ceasefire in the Middle East continues to hold. This comes as new data showcases how sales at petrol stations spiked at the beginning of the conflict as Brits panic bought fuel in fear of price rises and shortages.
According to the RAC’s Fuel Watch, the price of petrol and diesel rose by 1.9 pence and 3.3 pence respectively between Monday 6 and Friday 10 April. Compare this to the week prior where the increases in fuel prices were 3.9 and 6.7 pence.
Head of policy at the RAC, Simon Williams, said: “As we predicted earlier this week, the rate of price increases has slowed due to oil falling back below $100 for the last two days. This has reduced wholesale costs which should, if sustained, lead to the price of petrol coming down.”
When will fuel prices come down?
How quickly the prices will decline is up for debate, with last month seeing the biggest monthly rise in the cost of fuel ever recorded; petrol and diesel rosse by 20 and 40 pence per litre respectively between the beginning and end of March. The Competition and Markets Authority says it will keep an eye out for so-called “rocket and feather” pricing – when costs reactively rise and then take a long time to drop back to normal levels.
Executive director for markets at the CMA, Juliette Enser, previously said: “While price increases might be inevitable because of rising wholesale costs, it is important that those increases reflect genuine cost pressures… We will be closely scrutinising and reporting on what’s happening with fuel prices and call out any concerning behaviour.”
Evidence of panic buying
It’s estimated by the RAC that in the first few weeks of the conflict that drivers spent an additional £307 million on fuel than they otherwise would have done. Much of this is down to the rising prices but panic buying is also a factor, which is highlighted in new data analysis by New Automotive.
Despite the higher prices, New Automotive found that petrol sales were 30 per cent higher than they would have been otherwise. Diesel also saw a visible spike in sales at forecourts, despite the fuel’s waning popularity in the UK.
Chief executive at New Automotive, Ben Nelmes, explained that “March usually sees a rise in fuel sales because it is a big month for the delivery of newly registered cars, all of which need filling up.”
“This March was different,” Nelmes continued, “as everyone rushed out to beat a rise in the petrol and diesel price by filling up before prices skyrocketed. There were also rumours about shortages, though there's little evidence that there was any risk of shortage.”
As of the time of writing on Friday 10 April, the average UK price of petrol and diesel currently sits at 158.16 and 191.31 pence respectively, while the wholesale price of a barrel of Brent crude oil is marked at around $95. Stay tuned to Auto Express for further updates.
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