Fleet fuel costs may be set to rise significantly amid a ‘perfect storm’ that could send the price of petrol and diesel to 2019 record levels.
A "nasty combination" of rising oil prices, notably due to rising tensions in the Middle East, and a falling pound means that August could prove to be a very “costly month on the UK’s roads”, according to the RAC.
Consequently, the motoring organisation is warning that the price of a litre of unleaded petrol could “easily” go above the 2019 high of an average 130.67p seen at the start of June and diesel exceeding the year’s high point of an average 135.54p at the end of May. At the end of July the average price of a litre of unleaded petrol was 129.21p and that of a litre of diesel was 131.95p.
Oil is traded in dollars and last month the pound lost 3% on the dollar, a downward trend that has continued in August with sterling reaching a 31-month low. Experts say it is due to both sterling weakness as a result of Brexit and the dollar’s strength.
RAC fuel spokesman Simon Williams said: “July saw a return to rising pump prices. While there were only relatively small rises in both petrol and diesel, the situation might have been far worse if the drop in the value of the pound had combined with the higher mid-month oil prices. And, of course this could still very easily prove to be the case if the pound doesn’t recover in the next few weeks. Drivers can only hope we don’t see the nasty combination of a rising oil price and a falling pound.”