The coming weeks will be “critical” when it comes to prediction where diesel and petrol prices might be heading over the rest of 2021, the RAC warn.
While COVID-19 travel restrictions remain in place, low oil demand should protect pump prices from rising too quickly. However, oil output is also important and any reductions in supply could push the cost of a barrel of oil beyond the $70 mark.
March saw prices rise for both petrol and diesel by 2.7p and 2.4p respectively, the fifth consecutive month of increases, and both fuels now cost the same as they did in February 2020.
The average price of a litre of petrol now stands at 126.28p, diesel at 129.07p. This means drivers are paying 12.2p and 11.4p more for every litre than they did at the start of November, a rise of about 10% rise in just five months.
It now costs £6.68 more to fill a 55-litre petrol car than it did in November (£69.45 in total), and £6.29 more to fill an equivalent-sized diesel car (£70.99).
Oil prices hit an historic low of just $13.21 last April but is currently $63.67 as of end of March 2021. The ongoing impact of the pandemic, coupled with a significant reduction in global travel is expected to prevent that figure rising much higher.
RAC fuel spokesman Simon Williams stated:
“The coming weeks and months are critical when it comes to working out where prices might be heading during the rest of 2021.
“For as long as global Covid travel restrictions remain, it’s hard to see oil prices rocketing – and that should protect wholesale, and in turn, pump prices from rising too quickly.
“However, what the major oil producing nations decide to do in terms of oil output is also important. Any further reductions in supply could start to push the barrel price up above the $70 mark again – spelling yet more pump price rises here in the UK”.
The best current value for fuel is with supermarkets, with a litre of unleaded currently costing 121.9p on average, diesel at 124.86p. Asda leads with petrol at just 120.99p a litre and diesel at 123.99p.
However, all the major retailers raised their prices in March at an average of 2.61p for petrol and 2.59p for diesel, in line with the rest of the industry.
Current RAC Fuel Watch data suggests that a pump price cut is imminent if retailers fairly reflect wholesale prices on their forecourts.