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Motorists are being warned of an increase in the cost of a tank of petrol off the back of rising oil prices and a slumping pound.
Brent crude has risen 6 per cent in the last month to $76.46 while the pound has slumped from $1.27 to $1.23 over the same period. Crude oil is the raw material for petrol and diesel and it is priced in dollars in international markets, meaning that a weaker pound makes for pricier fuel.
Howard Cox, founder of the FairFuelUK campaign said: “Oil is priced in dollars and its going to make a very negative impact for drivers on the forecourts and the wholesale price for drivers will be going up.”
The pound has suffered as investors sold large amounts of UK government debt, sending borrowing costs soaring, and leading Treasury minister Darren Jones to warn on Thursday that “public services will have to live within their means”.
And a weaker pound will mean more expensive holidays to and imports from the US, such as iPhones, software and food, as Britons grapple with the costs of soaring energy bills, tighter mortgages, and expensive groceries.
Petrol ended the year at an average of 136.9 pence per litre and diesel was 142.9 pence, according to the RAC, after three months of rising prices.
At supermarkets, petrol was 134 pence for unleaded and 139.5 pence for diesel.
Petrol and diesel hit record prices in summer 2022 in the wake of Russia’ attack on Ukraine, when petrol came in at 191 pence and diesel 199 pence.
Since then prices have fallen, only to begin rising again.
In November the Competition and Markets Authority, which monitors anti-competitive behaviour by companies, said profit margins on fuel remained higher than historic levels.
Consumer groups say that as oil prices rise, fuel prices rise faster, and when oil prices fall, fuel prices fall more slowly as retailers aim to bolster their profits.
The CMA said in a statement: “Supermarket fuel margins increased over the May to August 2024 period, up from 7.0 per cent in April to 8.1 per cent in August. Non-supermarket fuel margins also increased from 7.8 per cent in April to 10.2 per cent in August.”
Mr Cox called for transparent pricing. He founded PumpWatch, an effort to monitor fuel price margins across the UK and said that he needed the government to “give it some teeth” to help motorists.
Senior Conservative MPs have pressed the government on whether the chancellor will increase taxes or borrowing to aid the economy.
In the Commons, former Treasury minister John Glen said: “This Government have either got to cut spending, increase taxes or borrow more, and if the cost of borrowing is increasing, that moment is going to come sooner. Which of those choices is he inclined to make and when is he going to tell the British people honestly what this Government has done?”
Treasury minister Darren Jones replied: “The fiscal rules are non-negotiable, public services will have to live within their means, we’ve set the budget.”
The government was approached for comment.
