The days of cheap fuel for UK drivers are once again behind us thanks to an 8% rise in oil prices and freezing of production by a number of the world’s biggest oil producers. This marks the first time the price of petrol has increased since July 2015.
Simon Williams, spokesman for RAC fuel has warned us that “the good times” are over as price increases have happened with “a bit more of a bump than motorists were probably expecting.” March saw the price of petrol rise almost 5p on average from 99.9p to 105.26p across garage forecourts. A diesel price rise of almost 4p per litre from 101.56p to 105.26p occurred over the same period. This was the direct result of oil prices increasing from approximately $30 a barrel at the end of December to a high of $40 a barrel for four days in March.
The start of 2016 saw the cost of filling up at the pumps reduce thanks to surplus of oil supply from the largest producers, including Saudi Arabia. This price drop continued in February as Saudi Arabia and Russia made a deal to maintain output at January level. The world’s largest oil producers are set to meet in Qatar on April 17th to attempt to negotiate a new oil deal.
Unfortunately for us drivers fuel prices are expected to follow the trend of March as opposed to January and February with price increases on the horizon. Many oil producers still believe that further limits of production are needed and thanks to the laws of supply and demand this limit to supply will lead to an increase in price of petrol and diesel when we fill up in April. However, like any other commodity fluctuation is to be expected. WIlliams added “It looks as though we are heading towards a new norm of the oil price fluctuating between lower and upper limits of 35 US dollars and 55 US dollars a barrel”.
Just be thankful that we aren’t paying 142p a litre and 150p a litre for petrol and diesel respectively back in the dark days of 2012…