Prices for petrol could surge up to 140 pence per litre (ppl), with diesel rising to 144ppl, due to currency fluctuations pushing up wholesale fuel prices, the PRA has warned.
PRA chairman Brian Madderson said: “The unexpected crash in the exchange rate for the Pound against the US Dollar, from US$1.58 to US$1.48, in just four weeks from mid-June is hitting wholesale fuel costs.”
Brent Crude price has increased by US$3 a barrel due to the new Middle East uncertainty following events in Egypt and this has resulted in the price at the pump increasing by 1ppl.
However the major factor in the rise in fuel costs is Sterling, which accounts for 3ppl of the overall 4ppl increase seen on forecourts.
Madderson added: “The new Bank of England Governor, Mark Carney, shoulders some blame for recently indicating that UK interest rates will remain low, contrary to market expectations. This combined with the poor UK manufacturing data this week and the US promise to let quantitative easing taper off this year, provide good reason for operators to flee Sterling.
“This is at least fully transparent if still unwelcome news for motorists, businesses and UK inflation as the economy struggles to rebound.
“We now expect the average price for petrol to surge towards 140ppl and diesel to 144ppl just as the school holidays spark the start of the summer driving season.”