The forecourt sector is facing fresh uncertainty over fuel prices after tensions in the Red Sea triggered an increase in the price of oil.
It comes amid a sustained fall in pump prices, which are lower than at any time since 2021, at an average of £1.43 for a litre of unleaded, according to the RAC. The drop has contributed to UK inflation in November slowing to its lowest rate in more than two years.
The cost of transporting oil is set to rise following moves by BP and Equinor to halt shipments through the Suez Canal after attacks this week on tankers off Yemen by Iran-backed Houthi rebels, and instead send their ships on the much longer route around South Africa.
The Petrol Retailers Association notes that the situation has yet to translate into increasing pump prices. Its executive director Gordon Balmer says: “Independent fuel retailers are mindful of the pressure on household budgets and at this time of the year with many people travelling they are doing all they can to keep fuel prices as keen as possible.”
However, the RAC – which has long accused the industry of not passing on wholesale reductions in the price of petrol to consumers – says it is too early to assess the impact of the latest international crisis.
“While tankers avoiding the Suez Canal has the potential to push up the oil price, the barrel is still below $80, $15 lower than it was at the end of September,” says its fuel spokesman Simon Williams.
“Talk of this immediately affecting fuel prices is unhelpful as we are still waiting for retailers to fully pass on the savings from much lower wholesale costs. We don’t want to give them a reason not to continue cutting their prices, especially at the most expensive time of the year.
“The current 141.7p average price of petrol should fall to nearer 132p if retailers play fair with drivers. This means even if the Red Sea situation worsens, there is no reason for the biggest retailers to push up prices as fuel is still overpriced.”