In August, drivers faced one of the steepest monthly increases in fuel prices in over two decades, as recent data reveals.
The average petrol cost surged by 6.68p per litre last month, reaching 145.57p, tacking on almost £4 to a full tank’s expense. Diesel prices rose by 8p, averaging 154.37p, which meant an additional expenditure of around £4.50 for a full tank.
According to the RAC, this leap in petrol prices was the fifth largest in the past 23 years, while the diesel increase ranked sixth in monthly hikes.
RAC spokesman, Simon Williams, termed these hikes as “disturbing” and a “jolt for motorists”.
The RAC attributes this sharp incline to the production reductions by the Opec+ countries, a strategy to uphold oil prices.
Wholesale rates started climbing in the latter part of July, and within two months, oil prices have escalated by $12 a barrel.
This upswing in wholesale rates swiftly impacted the prices at fuel stations, pushing petrol prices to their peak since last December, as per RAC’s records.
This pronounced surge hinders the attempts to keep inflation in check. As fuel prices ascend, inflation usually follows due to the augmented transportation costs of goods.
On Sunday, Chancellor Jeremy Hunt mentioned to the BBC that September’s inflation data might experience a temporary spike. However, he remained confident that the Government was effectively addressing the issue of escalating prices.
Mr. Williams commented that the fuel price hike could have been even more severe if major retailers hadn’t offset some of the rising wholesale expenses.
Fuel stations, especially supermarkets, have faced criticism for their profit margins from fuel sales. Allegations suggest that these margins have been artificially amplified using the pretext of increasing oil prices.
A probe by the Competition and Markets Authority has prompted fuel sellers to adopt more clarity in their pricing. The authority also advocates for a dedicated entity to closely examine profit margins.
Mr. Williams suggested that the recent investigation by the CMA might be the reason why the profit margins of fuel retailers are now aligning more closely with their historical averages.
He further stated, “It seems they might have used the surge in wholesale prices as a discreet way to adjust their pricing. Drastic price cuts at the pumps right after the CMA’s findings might have been too conspicuous.”
He expressed hope, saying, “We aspire that these major retailers continue to maintain equitable pump pricing, even when the wholesale prices decrease. The future will provide the answer.”
This comes after the AA issued an alert last month, indicating the end of the season with relatively lower petrol and diesel prices.
