Diesel prices look set to soar as Brent Crude climbed to $95 a barrel today (19 September), its highest level for 10 months.
The rise follows a warning by the International Energy Agency (IEA) that a production cut by Saudi Arabia and Russia would result in a “significant supply shortfall”.
The latest RAC Fuel Watch data show UK motorists are currently paying on average 155.5p per litre of petrol, while diesel is averaging 159.05p. Petrol prices have soared by 10p per litre since 1 August, while diesel costs have increased by around 13p. RAC fuel spokesperson Simon Williams said: “Diesel is set to jump in price from its current average of 159p a litre to over 170p.”
The problem of fuel price rises is compounded by the lack of competion in the UK fuel retail market according to a recent report published by the Competition and Markets Authority (CMA), which found that the UK had been suffering from a weakening of competition in fuel retail since 2019.
The report also found that motorway service stations are currently charging around 20p per litre more for petrol and 15p more for diesel compared to other fuel stations around the UK.
Sarah Cardell, chief executive of the CMA, has pledged to reignite competition among fuel retailers. She said: "It needs to be easier for drivers to compare up to date prices, so retailers have to compete harder for their business.
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“This is why we are recommending the UK government legislate for a new fuel finder scheme which would make it compulsory for retailers to make their prices available in real time.”
Russia's invasion of Ukraine in February 2022 saw oil prices soar, hitting more than $120 a barrel in June last year.
They fell back to just above $70 a barrel in May this year, but have steadily risen since then as producers have tried to restrict output to support the market.
Saudi Arabia and Russia, members of the Opec+ group and two of the world's largest oil-producing nations, decided to reduce production earlier in August.
At the same time, the US Energy Information Administration said on Monday that US oil output from its top shale-producing regions was set to decline in October for the third straight month, reaching its lowest level since May.