Fuel prices stop rising after 43 days of increases, RAC says
Fuel Prices Pause After 43-Day Streak of Increases
Following a 43-day stretch of rising costs, petrol and diesel prices have halted their climb, according to the latest data from the motoring group the RAC. This plateau comes after a temporary easing of tensions in the Gulf, which led to a decline in crude oil prices from their recent high points. Despite this, fuel costs remain notably elevated compared to pre-war levels.
Crude Oil Costs Influence Market Trends
Crude oil, a fundamental component of both petrol and diesel, has seen its wholesale prices stabilize as the Strait of Hormuz—key for transporting around 20% of global oil and LNG—remained closed during the conflict. The RAC noted that petrol now averages just over 158p per litre, up from 133p in late February. Diesel, meanwhile, has surged from 142p to 192p per litre, reflecting ongoing market pressures.
Price Drops Expected Soon?
The RAC’s policy head, Simon Williams, suggested that the recent dip in wholesale fuel costs could lead to a decline at the pump in the coming days. “Wholesale fuel costs are now significantly lower than they were at the start of the month, so forecourt prices should begin to come down,” he stated. “As things stand, we’d expect petrol and diesel to drop by several pence a litre in the next week or so,” he added, expressing hope that this trend would ease the financial burden on drivers.
War’s Impact on Fuel Costs
The US-Israeli conflict with Iran initially triggered a spike in global fuel prices by disrupting the Strait of Hormuz. This critical waterway typically handles 20% of the world’s oil and liquefied natural gas, and its closure sent shockwaves through the energy market. As a result, the cost of filling a family car with petrol increased by £14, while a full tank of diesel now costs £27 more than before.
Historical Context and Market Dynamics
Current prices still lag behind the summer 2022 peak, when petrol hit 191.5p and diesel reached 199p per litre. Diesel has risen more sharply than petrol due to its higher refining complexity. The UK relies on overseas imports for about half of its fuel needs, and global demand remains robust, contributing to sustained price levels.
Regional Variations in Fuel Costs
Rival organisation the AA highlighted that price reductions might not be uniform, citing the “pump-price postcode lottery.” “If you live in a town with competitive retailers, you may see some movement. If you live somewhere where they all watch each other to see who budges first, you won’t,” said Edmund King, the AA’s president.
Regulatory Scrutiny and Market Behavior
Previously, the motor fuels sector faced accusations of rapidly raising prices when oil costs climb but slowly lowering them when prices fall. In late 2022, the Competition and Markets Authority (CMA) identified evidence of “rocket and feather” pricing. Since then, the CMA has intensified its monitoring of fuel prices, aiming to address rapid cost fluctuations.
New Scheme Helps Drivers Compare Costs
A recent government initiative allows UK motorists to compare fuel prices across different stations, providing transparency in a market often marked by regional disparities. This tool is designed to support consumers navigating the current pricing landscape.
