RAC Fuel Watch data for April shows the second consecutive month of price rises at the pumps as a result of a 25% increase in the cost of a barrel of oil from $36.51 to $45.49, leading to the highest price since 10 November 2015.
The report says the escalating oil price is the primary reason behind the forecourt increases with the average price of both petrol and diesel going up by more than 2ppl to 108.27ppl (from 105.64ppl) and 108ppl (from 105.41ppl) respectively. The wholesale cost of petrol rose 2.5ppl whereas diesel increased by 4.6ppl.
Supermarket average prices rose by 3ppl for both fuels with petrol rising from 102.68ppl to 105.85ppl and diesel from 102.58ppl to 105.76ppl.
RAC fuel spokesman Simon Williams said: “The physical or spot price of Brent crude oil saw its largest one-month gain in price in the past 12 months. While this has had an adverse impact on the price motorists are paying for petrol and diesel on the forecourt, the world is still producing too much oil which means prices should not rise much further, and may stabilise or even start to fall again.
“It’s worth remembering that while prices have gone up in both March and April motorists are still paying 7ppl less for petrol and 11ppl less for diesel than they were at this time a year ago which means a tank of unleaded is more than £3 cheaper and diesel is £6 less expensive.
“The world oil market is currently in a very unusual situation. For some time OPEC – the Organisation of the Petroleum Exporting Countries – has been operating an overproduction strategy to keep prices low to stop the US producing oil from fracking, but April saw reduced production from Iraq and Nigeria due to supply disruptions and from the United Arab Emirates due to maintenance, which alongside a US fall in production, appears to have led to the oil price going up.
“But, if the barrel price reaches $50 drilling would become a profitable option again for US shale producers and OPEC’s long-term efforts to maintain its market share would be undermined. For this reason it seems unlikely that the oil price will increase too much more.”
Across the UK, the South East saw the biggest increases with more than 3ppl going on both the average prices of petrol and diesel – unleaded went from 105.48ppl to 108.89ppl and diesel from 105.52ppl to 108.9ppl. The East Midlands recorded the lowest petrol price rise of 2.77ppl from 105.4ppl to 108.17ppl whereas the price of diesel in Northern Ireland was the lowest, only rising by 2.63ppl from 104.02ppl to 106.65ppl.