The sudden price hike in both Brent crude oil and UK wholesale fuel prices has thankfully receded as the likelihood of US and UK intervention in Syria subsides, Brian Madderson, PRA chairman, has reported.
"This once again demonstrates the volatility of the UK’s road fuels market as traders and speculators cause instability in prices," he said. "However, wholesale prices increased so quickly during August and early September, pump prices did not reflect the full scale of the changes. Therefore, while fuel prices will fall, the PRA believes the reduction will happen gradually over the next few weeks.
“In addition to the recent geo-political events, demand for petrol across the UK continues to wane as motorists cut back on non-essential journeys and drivers opt for better performing diesel engines.
“On the other hand, demand for diesel is rising and this, together with seasonal increases for heating oil which comes from the same middle distillate in the refining process, is likely to limit the price reduction of diesel at the forecourt.
“It is important to remember that the geo-political tensions in the Middle East have certainly not been settled and any new disruptions could immediately impact oil prices again with consequent pressures on UK inflation rates. The Monetary Policy Committee needs to tread warily.”