UK Fuel Prices Could Hit Record High in 2018
Drivers to feel the financial pinch as experts hint the cost of petrol and diesel could reach record highs in 2018
UK average fuel prices
UK fuel prices might hit record highs and force drivers to make brutal, financial, cutbacks if the cost of oil continues to rise throughout 2018, RAC Fuel Watch suggested. During May 2018, the price of oil rose by $2.08 per-barrel to $76.39. This had a significant impact on the average prices at the pump. For instance:
- Petrol rose 6.0 pence per-litre, to 129.41
- Diesel rose 6.12 pence per-litre, to 132.39
The May fuel price rises were the latest of many and a stark contrast to the recent past. Oil only cost $26 per-barrel in early 2016, for example. Petrol and diesel were priced at about 101 pence per-litre at this time. Petrol, therefore, is now 28.41 pence per-litre more expensive than 2016. Diesel costs a further 31.39 pence.
The recent price hikes had a considerable, cumulative, impact on drivers. A large family hatchback typically has a 62-litre fuel tank, for instance. In 2016 – when petrol cost 101 pence per-litre - it cost £62.62 to fill such a vehicle from empty. However, May 2018 price rises increased the expenditure to £80.23 (plus £17.61).
Why fuel prices increased
But why the rises? The Organisation Of The Petroleum Exporting Countries and Russia have limited oil production “to reduce an oversupplied market”, RAC Spokesman Simon Williams explained. In other words, supply versus demand is playing its part. “The oil price has increased by $30 a barrel since July 2017”, he clarified.
Furthermore, The United States has reimposed sanctions on Iran which is among the most prolific oil producers in the world. Mr Williams confirmed the sanctions look set to “tighten supply even further” and cause the cost of oil “to go up even more” per-barrel.
Some experts expect oil to reach $100 per-barrel in 2018. If so – and if the pound remains low against the American dollar – fuel prices could be in the region of the record highs of April 2012. At that time, petrol cost 142.48 pence a litre and diesel cost 147.93.
Consequences for motorists
The RAC spokesperson also suggested how any future hikes might affect drivers, the economy and by association the government’s income from taxation. “This will inevitably force families to make some tough choices about how they spend their money”, he explained.
“We know from experience people cut back on longer social journeys in order to save money. It is also likely to have a negative effect on consumer spending, as putting fuel in the car to get to work takes priority over shopping and eating out”, Mr Williams revealed.