UK drivers could soon be paying as much as £1.16 for a litre of petrol as prices are set to rise by as much as 5p per litre by the end of this month.
The potential rise is being put down to two reasons: the weakening value of the British pound in relation to the US dollar, and the rising price of crude oil - the essential component of both petrol and diesel.
Since the Brexit vote in June, the value of the pound has fallen by 15% against the dollar. Oil is purchased in dollars, making buying it more expensive for UK companies.
The Petrol Retailer’s Association (PRA) - which represents the views of forecourts across the country - is warning that the price customers are paying for fuel hasn’t so far risen in line with the costs for suppliers.
Speaking to What Car?, AA spokesman Luke Bosted said that the costs to fuel suppliers have risen by around 6p per litre over the past year, and that smaller retailers would “have no choice” but to pass that cost on to consumers.
Following Britain's vote to leave the European Union, consumer groups including the AA warned that petrol prices could rise, but so far the increase has been limited. The price of both petrol and diesel had been falling towards the end of last year and had remained relatively stable until March, but has been on a small but steady rise since then.
A 5p per litre rise would push the average price of petrol in the UK to £1.16 per litre for petrol, and £1.18 for diesel. Premium petrol and diesel will continue to cost substantially more.
Chairman of the PRA Brian Madderson has warned that the rises are likely to take place unless there are “favourable corrections to the exchange rate and global oil prices.”
The PRA has called on Chancellor Philip Hammond to reduce the excise duty - the tax placed on certain goods - of petrol in his Autumn Statement, which is due on 23rd November. The duty is currently set at 57.95p per litre.
Will I be charged more for petrol and diesel?
Unless the currently volatile market stabilises, it’s looking likely that prices will rise. That said, while independent retailers will be forced to drive up their prices first, large supermarkets – which operate on different contracts - will be able to keep costs down for the time being, as well as promoting competitive prices in their vicinities.
How can I save fuel?
There are a few simple things you can do to cut down on your fuel bills. Perhaps most importantly, remember to shop around for the best deal on petrol and diesel. Independent forecourts generally charge more than large supermarkets, so be sure to have a look within your local area.
Secondly, remove any excess weight from your car, because the heavier your car is, the more fuel it will use. Driving efficiently will also help your car to use less fuel, as will keeping up with regular maintenance and oil checks. Get more fuel-saving tips here.
You can also drive a fuel efficient car, and What Car?'s True MPG tests can help you to see what sort of real-world fuel economy you can expect day-to-day. The most fuel efficient car we've ever tested is the Vauxhall Astra 1.6 CDTi 110 Ecoflex, but you can find our full list of results here.
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