UK fuel prices: why petrol and diesel costs are predicted to rise in May
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However, April’s respite could be short-lived as experts are warning that global market shifts could bring further rises in coming weeks.
Petrol and diesel prices peaked at new record levels in late March, with petrol hitting 167.3p per litre on 22 March and diesel reaching 179.9p a day later. They then dropped off in the last days of March and remained largely static throughout April.
According to the latest data from the RAC Fuel Watch Service, petrol prices are now 4.5p per litre cheaper than at their 22 March peak. However, most of that reduction came in late March, with prices at the end of April just 0.5p cheaper than at the start of the month.
Diesel has changed even less, down 2.5p compared with 23 March but with a mere 0.13p change between 1 April and 30 April.
RAC fuel spokesman Simon Williams said that while April’s prices were some respite for drivers, retailers had short-changed customers by refusing to pass on wholesale savings seen during the month.
He also warned that uncertainty in global markets and a weakening exchange rate could lead to fresh rises in coming weeks.
Wholesale oil prices finished April slightly higher than at the start of the month but the pound’s value slipped against the dollar, in which fuel is traded, meaning costs for UK retailers have risen.
Mr Williams said: “Although the price of oil has cooled considerably, there’s still plenty of uncertainty in the market which is leading to prices jumping around a lot. This coupled with the exchange rate worsening isn’t good for drivers and news that the EU is planning to phase out Russian oil is likely to cause the barrel price to rise.
“However, retailers really should have passed on the savings they were benefitting from when wholesale prices were lower earlier in April; sadly for drivers this didn’t happen. Instead, the biggest retailers, which buy most frequently, held out, protecting themselves from future rises. “
He added that retailers’ profit margins were as much as 4p per litre higher in April than in March.
Analysis by the AA found that wholesale petrol prices rose 5p per litre last week and its fuel spokesman Luke Bosdet said drivers should “brace themselves” for rises at the pumps in coming weeks.
Fuel prices have been volatile for months as the war in Ukraine and concerns over oil supplies have affected the markets, which were already facing supply issues as global demand soaring in the wake of the pandemic.
Petrol is now 32p per litre more than it was a year ago, and diesel 47p more. According to the RAC’s figures, the “big four” supermarkets remain the cheapest places to fill up, with Asda offering the lowest prices on both petrol and diesel.
The latest figures come as oil giant Shell reported record-breaking profits of £7.2 billion in the first three months of 2022.