AA Predicts Rise in Petrol Prices

The Automobile Association (AA) LogoAccording to the latest fuel prices report from The Automobile Association (AA), pump costs are on the rise once again after a slight decline of less than a month. This comes due to a rebound in the cost of oil over the last 3 weeks feeding through to higher diesel and petrol prices.

After an average penny per litre fall in UK petrol prices, the cost slowly increased by one-third of a penny in the last week. The AA has put the average petrol price at 136.07p per litre. Right now, the most expensive petrol is at 137.4p per litre in Northern Ireland. The average cost for diesel is 139.77p per litre right now, which is 1.72p less than in the middle of May. The most expensive is at 140.5p per litre in Scotland.

Drivers are losing out due to the rising price of oil feeding through into prices at the pump much faster than the falling prices did, the motorists’ association said. Because of this, the short decline in oil prices was pretty much ignored altogether since they would have risen again by the time the fall was factored into the pump price. Even though, in the 4 weeks until the middle of June, the average price of petrol fell by 0.86p a litre, the underlying cost fell even more and faster. This short-changed motorists by at least 2p per litre during the period. The AA calculates that this cost the average 2-vehicle family £8.49.

Brent crude oil prices were trading at about $115 per barrel through much of March, which put the average price of petrol around 133.5p per litre. Then the cost of oil steadily rose in April to more than $126 per barrel, sending petrol prices to 137.43p a litre by May 9. Oil prices fell to less than $110 per barrel in early May before jumping back to $115 per barrel; however, petrol prices stayed around 135.75p a litre. This is 2.25p more than when the price of crude oil was at that level just 2 months before. Diesel prices peaked in the second week of May at 143.04p per litre.

AA president Edmund King says that motorists, consumers and the country are open to being pinched by whoever wants to make a little extra money if there isn’t transparency in the fuel and oil markets, as well as a regulator to ensure that prices are fair. The clear failure to pass on the benefit of the decline in oil prices in early May adds more weight to the demands of The Fédération Nationale d’Automobile (FIA), he added. This comes after the FIA, a coalition of motoring groups like the AA, last month demanded an inquiry into how benchmark diesel and petrol prices are determined at Rotterdam, the key trading centre in Europe.



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