ECONOMY
Average petrol prices near 150p a litre as Ukraine tensions add to cost of living pressure

Petrol costs at UK forecourts are closing in on 150p a litre as tensions between Russia and Ukraine drive global oil prices higher.

According to the RAC, the average rate for a litre of petrol hit 149.3p on Tuesday – a new record – while diesel was priced at 152.68p.

The motoring organisation warned motorists to expect petrol to hit the “grim milestone” of 150p in coming days.

Prices vary across the country and some forecourts are already charging for fuel at above that average level.

Higher fuel prices have been among the factors behind Britain’s cost of living surge – helping push inflation to a three-decade high.

A recent increase in the oil price after Russian troops entered Ukraine has further added to the upward pressure.

Brent crude surged to $99.50 a barrel earlier this week, its highest level since September 2014, and analysts expect it to push well beyond the $100 level.

The oil price has rebounded sharply since the early stages of the pandemic

© OtherThe oil price has rebounded sharply since the early stages of the pandemic

Worries about the capacity of oil producing countries to meet resurgent demand have also been behind the increase over recent months.

Demand for oil had plunged during lockdowns leading the price to slump below $20 a barrel in 2020 but it has since rallied sharply with the return of economic activity.

Victoria Scholar, head of investment at Interactive Investor, said: “Strong market fundamentals coupled with the possibility of a Ukraine invasion by Russia means that oil entering triple digits is still very much on the cards.”

RAC fuel spokesman Simon Williams said: “Petrol is sadly creeping ever closer to the shocking landmark of £1.50 a litre.

“With a tank of petrol now costing over £82 and diesel nearly £84, drivers will be wincing every time they go to fill up.

“And those on lower incomes who rely on their cars will be starting to suffer.”

While fuel prices are at a record high, it was more expensive to fill up in real terms when they previously peaked in April 2012.

The 142p cost of a litre of petrol at that time is equivalent to 178p at 2021 prices, according to the Bank of England’s inflation calculator.

Motoring groups have in recent months accused some retailers of taking a bigger profit cut than usual from fuel – suggesting that it was not only global oil prices driving up motorists’ costs.

Meanwhile, consumers are also being hit by sharp price rises across the board, most notably for household gas and electricity usage.

The tensions over Ukraine are adding to price pressures in that sector – with UK wholesale gas for next-day delivery climbing by as much as 12% on Wednesday to 212p per therm.

That is much lower than the peak of more than 450p seen late last year but still several times more expensive than typical levels before gas prices began to climb steeply about six months ago.

Source: News.sky.com

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