The price of petrol and diesel rose rapidly last month, resulting in some of the largest fuel prices increases in 23 years.
RAC Fuel Watch data shows that the price of petrol went up by nearly 7p a litre during August 2023, while diesel prices rose by nearly 8p a litre.
Petrol increased from an average of 145.5p a litre to 152.2p a litre. This made filling the average 55-litre fuel tank almost £4 more expensive. The average fill-up now costs £83.74.
Diesel prices rose from 146.3p a litre to 154.3p a litre, meaning the average tankful is now nearly £4.50 more expensive.
The only period where fuel prices rose more rapidly was in the months following Russia’s invasion of Ukraine.
Why are fuel prices rising?
The increasing cost of oil is behind price rises at the filling station. The cost of a barrel of oil has risen nearly $12 since the start of July. It now costs nearly $87 a barrel.
This is because producer group OPEC+ has chosen to reduce supply.
As fuel retailers are paying more for oil, they are passing the costs on to motorists in the form of more expensive petrol and diesel.
The RAC says August’s fuel price rises will have been a big shock to motorists, with £4 going on the price of a tankful in just a few weeks.
“It is galling, particularly for those who drive lots of miles or run an older, less fuel-efficient car,” said spokesman Simon Williams.
Will fuel prices continue to rise?
There may be respite in the coming weeks. The RAC notes that the US summer driving season is drawing to a close, while the slowing Chinese economy could also ease demand for oil.
What’s more, recent fuel prices could have been far worse, had the biggest fuel retailers chosen not to let their inflated margins continue.
Instead, fuel margins have returned to more normal levels as the wholesale price of fuel has gone up. It is hoped this normalisation will continue.
“They have clearly been influenced by the Competition and Markets Authority’s investigation as, all of a sudden, margins are once again closer to their longer-term averages,” said Williams.
“It appears they used the whole sale price rise to subtly cover their tracks – after all, big reducing at the pumps soon after the CMA’s findings were announced would perhaps have been far too obvious a step.
“All we can hope is that this move by many big retailer back to fairer forecourt pricing remains when wholesale costs go down again.
“Only time will tell.”
Check out our guide to the latest petrol and diesel fuel prices for more info.
The average price of a litre of unleaded in the UK at the start of September 2023 UK was 152.5p. This compares to 145.5p at the start of August.
The average price of a litre of diesel in the UK at the start of September 2023 UK was 154.2p. This compares to 146.3p at the start of August.
Fuel prices vary significantly across the UK. A litre of unleaded in the South East is 153.7p. In Northern Ireland, it is just 149.5p.
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