Fuel prices have reached an all-time high amid rising oil prices, despite the RAC's assertion that there's "no justification" for significant price hikes. The motoring organisation said the UK average price of petrol and diesel hit record levels on Monday, with petrol topping 148p per litre and diesel hitting 151.57p per litre.
The news came after the RAC told petrol retailers there was no reason to increase prices, even though the price of oil approaches the $100-a-barrel mark. That’s an increase of more than 60 percent over the past 12 months, due in part to global oil production being “out of kilter” with demand, which has risen as the Covid-19 pandemic begins to wane. Tensions between Russia, the world’s third-largest oil producer, and Ukraine have also caused the rise.
But the RAC said as long as petrol stations retained ‘normal’ profit margins of around 6p per litre, there was “no justification for average forecourt prices to rise very much”. Even so, average petrol prices have rocketed to their highest level ever, at more than 148p per litre and diesel prices have exceeded 151p per litre – another record.
And it seems retailers have followed the advice, despite the rising cost of fuel. According to RAC fuel spokesperson Simon Williams, the rise has solely been caused by the high oil price, and not because retailers are increasing their profit. Although the motoring organisation blamed petrol stations for inflating their margins in December and January, Williams said the average retailer margin is now at a “more normal” level of around 7p per litre.
“Petrol has unfortunately hit a frightening new high of 148.02p which takes filling a 55-litre family car to an eye-watering £81.41,” he said. “With the oil price teetering on the brink of $100 a barrel and retailers keen to pass on the increase in wholesale fuel quickly, new records could now be set on a daily basis in the coming weeks.
“The oil price is rising due to tensions between Russia – the world’s third biggest oil producer – and Ukraine, along with oil production remaining out of kilter with demand as the world emerges from the pandemic. As a result drivers in the UK could be in for an even worse ride as pump prices look certain to go up even more.
“On a positive note, retailer margins – which were the reason drivers paid overly high prices in December and January – have now returned to more normal levels of around 7p a litre. We urge the big four supermarkets, which dominate fuel sales, to play fair with drivers and not to make a bad situation on the forecourt any worse by upping their margins again.”