A sharp fall in the value of sterling could lead to further increases of prices at the pumps, according to the RAC.
During Thursday night (October 6) Sterling plunged from just over $1.26 to $1.18 before recovering to around $1.23.
RAC fuel spokesman Simon Williams said: “The unexpectedly sharp fall in the value of the pound will make the wholesale price of fuel go up. Sadly, it’s also happened at a time when the oil price appears to be rising again so the combined effect will be bad news for motorists. We’re likely to see the price of both petrol and diesel increase by around 3ppl in the next fortnight.
“Oil has gained $6 a barrel since OPEC announced at the end of last month that it is finally going to move to cut production potentially signalling an end to its two-and-a-half-year oversupply strategy. The physical cost of a barrel finished trading on Thursday at just over $50 – a price not seen since 9 June when the pound was worth $1.45, and the average price of unleaded and diesel was around 111p a litre.
“With the pound now worth so much less, there can be no other outcome than an unwelcome increase at the pumps from the current national averages of 113p for petrol and 114p for diesel.”
PRA chairman Brian Madderson agreed: “The double impact of the pound weakening against US$ and global oil prices strengthening will cause pump prices to move sharply upwards," he said.
“The pound has now fallen by over 15% to U$1.24 since the pre-Brexit level of US$1.47 and dropped even more alarmingly last week to just US$1.15 in the ‘flash’ trading which started in Asian markets. Fortunately it recovered quickly but there are City analysts talking about even lower levels to come including parity with US$.
“At the same time, renewed talks among OPEC members’ trying to curb oil production has led to a hardening of global oil prices with Brent Crude passing the psychological barrier of US$50/barrel.
“As a result, Platts wholesale costs to retailers have increased by over 6ppl for petrol and 7ppl for diesel in the last few weeks, whereas the UK average pump prices have moved up by less than 2ppl for both grades over the same time period.
“Thus motorists can expect increases of up to 4 or 5ppl by the end of the month unless there are favourable corrections to the exchange rate and to global oil prices. This will also increase UK inflation rates."