UK drivers are likely to be hit by a rise in petrol prices over the coming days, largely as a result of the damage that Storm Harvey has wreaked in the US.
The RAC on Friday said that the price of a litre of unleaded petrol is expected to rise by up to 4p per litre next week. That would take it above 121p per litre for the first time since December 2014. The increase would also mean that the average price of a litre of unleaded will be higher than that of diesel for the first time in over a year.
RAC spokesman Pete Williams said that Storm Harvey had led to the shut-down of large refineries in the Gulf Coast which is driving up US demand for petrol imports.
“The average price of a litre of unleaded on Thursday 31 August was 117.29p and diesel was 118.14p but we could see unleaded rise in the coming days to around 121p a litre, with diesel likely to stay stable around 118.5p,” he said.
“This will be the first time unleaded has been higher than diesel since June 2016 and we expect this to be the case for some time to come, or at least until the US oil industry is able to get refineries back into operation and production in the Gulf Coast returns to normal - to meet the United States’ immense appetite for gasoline,” he added.
Mr Williams said that one quarter of the refining capacity in the States remains offline, resulting in a shortfall of over four billion barrels a day. Crude oil production in the Gulf of Mexico is down 13.5 per cent. In response, oil traders are acting to redirect fuel to the US ahead of what is expected to be a busy weekend for travel as a result of the Labor Day holiday.
The price of a barrel of crude oil has increased to $52.79 in the wake of the floods in Houston.
“Americans are wedded to their petrol engines and while they have been endeavouring to become more self-sufficient through increased fracking they are now having to buy more unleaded from overseas which is reducing the availability of unleaded for the rest of the world,” Mr Williams said.
