Prices at the pumps grew far less than wholesale fuel prices in May, according to a new report by the RAC.
Its analysis of Experian Catalist average prices from 3 May to 31 May 2016 reveals that the average unleaded pump price rose 1.92ppl from 108.67ppl to 110.59ppl.
The average diesel forecourt price increased by 2.2ppl from 108.49ppl to 110.70ppl.
But wholesale prices for both fuels went up by greater amounts with petrol up by 3.2ppl and diesel by 4ppl, predominantly as a result of the oil price continuing to rise. The spot – or physical – price of oil rose 14% in May, adding $6 to a barrel ($43.18 on 3 May to $49.26 on 31 May), and a barrel also reached its highest price since mid-October 2015 when it finished trading at $49.53 on Thursday 26 May.
Looking at future prospects, RAC fuel spokesman Simon Williams said: “Much depends on the physical price of oil not rising any further. The oil price teetered around the $50 a barrel mark for the last few days of May having risen due to the extra demand from the start of the US summer driving season, but it has yet to go higher. Fortunately, some of the refinery issues which had led to lower than expected output have been resolved and we now have increased crude production in the Middle East.
“And, with the Organisation of the Petroleum Exporting Countries (OPEC) deciding not to curtail production at its six-monthly meeting in Vienna on Thursday, there is good reason to expect the oil price will not go far above the current level for the time being, but predicting what will happen with oil is far from straightforward.”