The PRA is warning unleaded petrol prices could be hiked as a result of the impact of Hurricane Harvey on the Texan coast around Houston, with the RAC predicting they could move well above diesel prices.

PRA chairman Brian Madderson said: “The wholesale price of petrol has increased by over 4.20ppl in just the past five days.

“With no major variations to the sterling to dollar exchange rate this week, and relatively stable prices for Brent Crude, this massive wholesale price hike can only be ascribed to the events in Houston.

“Across this coastal region, refineries have closed and oil rigs in the Gulf of Mexico have shut down, but it is still sobering that UK wholesale prices have been affected quite so quickly.”

The PRA has been in contact with Platts, and it has confirmed that “there have been a large number of oil tankers set to move to the US from Europe carrying gasoline to make up shortfalls in the Gulf region, therefore gasoline cracks have surged to a two-year high. Diesel has not been so affected as the UK imports over 40%, mainly from Russian sources.”

Madderson explained: “Margins have been tight for some time this year so increases of this magnitude will have to be passed on at the pump quickly. Average prices for petrol this week have been 117.3ppl and one can see averages above 120.0ppl gripping the market as we move into September. This will be bad for UK inflation, for cash strapped UK motorists and for the economy as money is diverted from other purchases.”

The PRA believes the Chancellor would be unwise to consider fuel duty increases in his Autumn Budget if he really wants the UK economy to avoid any recessionary trends.

The RAC said the price of unleaded petrol could rise by up to 4ppl, which would take the average price of the fuel above 121ppl – a price not seen since December 2014. RAC Fuel Watch data shows that this would also mean the average price of a litre of unleaded moves above that of diesel, something that has not been seen in the UK since early June 2016.

RAC spokesman Pete Williams said: “The price of unleaded petrol will leapfrog diesel early next week, rising by up to 4ppl as the impact of Storm Harvey and the shut-down of large refineries in the Gulf Coast drives up US demand for petrol imports.

“The average price of a litre of unleaded on Thursday 31 August was 117.29p and diesel was 118.14p but we could see unleaded rise in the coming days to around 121ppl, with diesel likely to stay stable around 118.5ppl.

“This will be the first time unleaded has been higher than diesel since June 2016 and we expect this to be the case for some time to come, or at least until the US oil industry is able to get refineries back into operation and production in the Gulf Coast returns to normal – to meet the United States’ immense appetite for gasoline.

“One quarter of the refining capacity in the States remains offline leaving a shortfall of over four million barrels a day, and crude oil production in the Gulf of Mexico is down 13.5%. In response, oil traders are acting to redirect fuel to the US ahead of the busy Labor Day weekend surge in travel.

“The price of a barrel of crude oil has also increased to $52.79 dollars following the catastrophic floods in Houston. Americans are wedded to their petrol engines and while they have been endeavouring to become more self-sufficient through increased fracking they are now having to buy more unleaded from overseas which is reducing the availability of unleaded for the rest of the world.

“We have already seen the wholesale price of unleaded increase by 5ppl in just the last week and the ongoing crisis in the state of Texas could have a prolonged impact on demand and, in turn, the wholesale price – so we may see further price increases on UK forecourts.”

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