The RAC has issued a stark warning to motorists about rising fuel prices as the ongoing Iran war threatens to further push up costs.
Prices fell at the end of April but are now nearing the highest since the war began in late February. There is likely to be worse to come if the wholesale costs of fuel stay as they are.
The RAC said pump prices hit 158p for petrol and 191p for diesel on 15 April. They drifted back from that on the hope that Donald Trump might at least cut a deal with Iran to reopen the crucial Strait of Hormuz waterway between the Persian Gulf and the Gulf of Oman, through which a large proportion of the world’s oil is transported.
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Motoring groups at the time complained that prices for drivers did not fall as quickly as they should, given that the oil price had dropped well below its highest level. On Tuesday, oil prices were down 2.3 per cent to $103.95 a barrel, but experts warn the worst could be yet to come.
RAC head of policy Simon Williams said: “The outlook for the first couple of weeks of May is more ominous. Wholesale petrol and diesel prices jumped by around 5p a litre last week, and are now at their highest since the war began. This hasn’t yet been reflected at the pumps – petrol is up by just a fraction of a penny so far this month, and diesel has continued to slowly drift downwards.”
On Tuesday, the RAC said petrol was at 157p and diesel at 188p. A rise of 5p a litre costs an extra £3.30 a time to fill a small to medium-sized car.
Mr Williams added: “But if oil prices, and in turn wholesale fuel prices, remain at elevated levels over the coming weeks, then future price rises at forecourts are all but inevitable. We urge drivers to continue to shop around for fuel to ensure they never pay any more than they need to when they fill up.”
The present price of oil is still well short of what some experts say it should be.
Dan Pickering, chief investment officer of Pickering Energy Partners, said: “The financial markets are essentially saying over a period of time, the expectation is, peace is going to break out and that prices will come down. So I think that’s what the market’s telling us. My view is they don’t reflect the tightness of the current physical market.”
