The cost of petrol fell in October ending three consecutive months of increases, but price rises are looming large due to the oil price going above $60 a barrel for the first time in more than two years (2 July 2015).
RAC Fuel Watch data for October shows unleaded petrol went down from 118.84ppl at the beginning of the month to 118.17ppl by the close – a fall of 0.67ppl. Diesel, however, rose for the fourth month in a row, going up 0.59ppl from 120.21ppl to 120.80ppl.
A barrel of oil saw a 9% increase finishing the month $5 higher at $60.98. Even though sterling remained comparatively strong against the dollar averaging $1.32 in October, the RAC says it is unlikely to be enough to prevent some pump price rises due to the rising cost of oil.
RAC fuel spokesman Simon Williams said: “At the start of October there was a 6ppl saving in the wholesale price of unleaded which retailers eventually passed on to motorists in pump price reductions. This month, however, the situation is reversed and the petrol wholesale price has gone up by 4ppl.
“Motorists may yet be spared from large pump prices if the United States takes advantage of the higher oil price to bring more fracking rigs online as this will bring more product on to the market, no doubt easing the barrel price.
“The US is already exporting two million barrels a day when not so long ago it was a nett importer of oil. OPEC, the Organisation of the Petroleum Exporting Countries, is unlikely to welcome this as it is doing its best to limit supply to make the oil price go up. Unfortunately for motorists, a return to the OPEC oversupply strategy that caused the low pump prices of early 2016 doesn’t seem likely.
“Eyes will also switch to the Chancellor who delivers his Budget this month, and with higher wholesale costs filtering down to the forecourts, the last thing they’ll want to see is an increase in fuel duty. We urge the Chancellor to resist this and leave the rate unchanged.”
The average price of unleaded petrol at the UK’s four biggest supermarkets is 114.81ppl – 1ppl less than it was at the start of October, while diesel is nearly a penny more expensive, going up from 116.82ppl to 117.72ppl.