Petrol prices are set to rise after a hefty increase in wholesale prices over the last week, and predictions of less than £1 per litre are likely to be thwarted, according to the PRA.
As oil prices plunged during the autumn average pump prices fell by around 23ppl, but from a low point of $45/barrel for Brent Crude in mid-January, there has been a significant rally back to $54/barrel this week.
PRA chairman Brian Madderson commented: “The wholesale cost of unleaded petrol has risen by nearly 3.50ppl since the 26 January, which will inevitably stall further falls in pump prices.”
Madderson had always cast doubt on suggestions that average prices would slip to less than £1 per litre and explained: “The PRA has always felt that crude oil needed to drop to $40/barrel or below for a sustained period for petrol to be consistently priced at less than 100ppl across the UK and averages today remain stubbornly above 106ppl. With this rebound in wholesale costs, we are going to see pump prices heading north again fairly soon.
“The current market is unsteady and predictions can quickly be overturned by events. We are questioning what short-term impact the strike by refinery workers in the US will have on European wholesale costs, and will the changing regime in Saudi Arabia affect their draconian pricing policy for crude oil?
“There is growing sentiment in the city that the bottom of the crude oil market may have been reached and the rebound has now commenced.”