In just three weeks, petrol prices have surged by 3p, sparking inflation worries for the Chancellor ahead of next month’s Budget announcement, according to recent data.
Unleaded fuel prices have climbed by 3.2p, from 140.2p to 143.4p per litre, while diesel prices have risen from 148p to 152p between January 29 and February 18, as reported by the RAC.
This increase in pump prices, which adds approximately £2 to the cost of refuelling a family car, is attributed to a rise in oil prices.
Brent crude oil has consistently traded above $80 a barrel for most of the past four weeks, a significant increase from its lower price in the preceding seven weeks. It was recently trading just under $82.
These price hikes occur as the Chancellor anticipates a decrease in inflation towards the Bank of England’s 2% target. This reduction could give policymakers the confidence to lower interest rates, potentially reducing government borrowing costs and possibly allowing for tax cuts before the election.
Simon Williams, the RAC fuel spokesman, commented: “The recent turnaround from falling to rising fuel prices is unwelcome news for motorists, and it could negatively impact the economy and future inflation rates as well.
While we don’t foresee a dramatic spike in prices, the upward trend in oil trading, coupled with a weaker pound, means higher wholesale fuel costs for retailers. Consequently, this leads to increased pump prices and greater expenses for everyday drivers.”
