Petrol prices have surged to a record high amid the ongoing conflict in Iran, prompting the RAC to caution about further price hikes ahead.
Currently, the average cost of unleaded petrol stands at 158.52p per litre, exceeding the previous peak of 158.31p per litre recorded on April 15. Following a slight decrease in prices until early May, petrol prices have been on the rise again.
The sharp increase in the price of Brent crude oil since the onset of the Middle East crisis in late February has led to a corresponding spike in petrol and diesel prices.
RAC projects that unleaded petrol could climb to a minimum of 160p per litre unless there is a substantial drop in oil prices. The price of Brent crude was hovering around $110 per barrel on Tuesday.
Simon Williams, the head of policy at RAC, expressed concern, stating that their fuel data analysis suggests unleaded prices are likely to hit 160p per litre in the near future unless there is a noteworthy reduction in oil prices.
On the other hand, diesel prices have notably decreased since reaching a peak in early April. Currently, diesel is priced at 185.92p per litre, marking a 6p drop from its highest point.
Despite the decline in diesel prices, RAC emphasized that prices should ideally be lower, urging retailers to pass on the benefits of reduced costs to consumers at fuel pumps.
A recent investigation by the Competition and Markets Authority (CMA) revealed that the surge in fuel prices is primarily driven by the increased cost of oil rather than retailers widening profit margins.
The CMA noted that although there were heightened fuel margins for some retailers in March, the overall difference between what retailers pay for fuel and what they charge consumers has remained relatively stable since the conflict began.
CMA’s CEO, Sarah Cardell, highlighted the pressure on households and businesses due to the escalating road fuel prices driven by the Middle East conflict. The CMA pledged to monitor the situation closely to ensure any cost reductions are swiftly passed on to motorists.
