On Monday, average fuel prices fell from record highs, with petrol nearing £1.67 a liter and diesel nearing £1.79. Crude oil rose to $139 per barrel in the first week of March, only to fall back the following week. According to the RAC, price settling could indicate that retailers have “finished” passing on higher wholesale costs to customers.
However, it is unclear when or if fuel prices will fall. The RAC’s fuel spokesman, Simon Williams, said Monday’s prices had “steadied with very slight reductions in both petrol and diesel.”
In recent weeks, UK fuel prices have risen at the fastest rate on record, with petrol up 13p since the beginning of the month and diesel up nearly 21p. Fuel prices, which were already rising as the world economy recovered from the coronavirus pandemic, skyrocketed after the Ukraine war pushed up oil prices.
Because crude oil is traded in dollars, changes in pump prices are primarily determined by crude oil prices and the dollar exchange rate. Russia is a major oil exporter in the world, and it is the target of economic and trade sanctions. After hitting a near 14-year high of $139 per barrel during the early stages of the conflict, Brent crude oil – a global benchmark for prices – fell back to around $100, but has since risen to $115 on Tuesday.
The most recent increase was prompted by the European Union’s discussion of a ban on the purchase of Russian oil, on which the bloc’s countries rely heavily.
Some countries, including the United States and Canada, have already banned Russian oil imports, but the EU has so far refrained. Meanwhile, the UK government has pledged to end Russian oil imports by the end of the year. Although the United Kingdom only imports about 6% of its crude oil from Russia, global price fluctuations affect the country.
According to Mr. Williams, the wholesale price of gasoline for retailers is currently £1.30 per liter for gasoline and £1.48 for diesel.
“With prices, this high before retailer margin and 20% VAT are added it’s clear we are in a tough place when it comes to being able to afford to drive,” he said.
“This is why the chancellor must take decisive and meaningful action in his Spring Statement that helps hard-pressed drivers and businesses.”