Prices at the pumps could be set to rise in the coming months, according to data from RAC Fuel Watch.
The price monitoring initiative from RAC found that the price of a barrel of oil rose from $79 to $92 in January. The wholesale price of petrol and diesel increased by 4.9p and 3.6p per litre for petrol and diesel respectively during the month.
Yet the retail price at the pumps did not reflect these rises, as retailers absorbed the costs. The price of petrol and diesel only went up by less than a penny per litre in January.
The average cost of a litre of unleaded now stands at 146.45p and diesel 149.81p. RAC’s figures showed that retailers made an average profit margin on petrol in January of 11.4p per litre, down from 16.4p in December, but still well above the long term average of 6p per litre. The average margin of a litre of diesel now stands at 8p, from 12p in December – a more normal level for diesel, according to the RAC.
It is clear from this data that fuel prices could start to rise sharply again in February and March to keep pace with wholesale costs.
The RAC say that while profit levels for retailers are more normal, they are concerned about what might happen next.
“On average, retailers are now making a more normal profit for each litre of fuel they sell than they did in December which makes today’s pump prices – although up slightly on December – more justified”, said RAC fuel spokesman Simon Williams.
“Storm clouds are gathering. With oil now having traded above $90 for a week – the highest price for more than seven years, wholesale fuel costs are once again increasing, which will undoubtedly lead to retailers putting up forecourt prices.
“Our message to the biggest retailers, which lead the market, is to treat drivers with respect by fairly reflecting the movement in the wholesale fuel market and not taking overly high margins.”