The average price of diesel and petrol in the UK witnessed a significant surge in September, propelled by global oil production cuts and a soaring cost of a barrel. RAC Fuel Watch data has revealed that diesel prices skyrocketed by over 8p per litre, while petrol prices rose by 4.5p per litre.
The price of diesel soared from 154.78p at the beginning of September to 163.11p by the end of the month, marking its fifth largest monthly increase since 2000. Similarly, unleaded petrol prices climbed from 152.49p to 157.01p, indicating the 13th largest monthly jump in prices in the past 23 years. These rises compound the hardship faced by drivers as they already endured price hikes in August, when petrol rose by nearly 7p and diesel by another 8p.
These surges mean that it now costs nearly £90 to fill up a 55-litre family diesel car, marking an increase of around £4 within a month, and the highest cost since April. Similarly, owners of petrol-driven vehicles are faced with a higher expense, paying over £86 to fill up a similar 55-litre tank, an increase of over £2 since September, with prices reaching levels not seen since December 2022.
According to analysis by the RAC, the recent price increases can be attributed to the actions of the oil producer group, OPEC+, which has been implementing production cuts that have tightened global supply. Additionally, the weakening value of the pound sterling makes wholesale fuel, which is traded in dollars, more expensive to purchase in the UK. During September, the cost of a barrel surged from just under $89 to approximately $96, contributing an 8p hike to the wholesale price of diesel. The last time oil surpassed the $100 per barrel milestone was at the end of August 2022.
As the cost of fuel continues to rise, UK motorists are left grappling with mounting expenses. The RAC has warned that these escalating prices show no signs of abating, posing significant challenges for households and businesses like taxi drivers who rely on their vehicles.
RAC fuel spokesman Simon Williams said: “Drivers are sadly really starting to suffer again at the pumps with September seeing another 8p a litre added to the average price of diesel which comes hot on the tail of a similar increase in August. Petrol has also gone up 11p since the beginning of August so there’s little respite whichever fuel drivers use.
“Our analysis of RAC Fuel Watch wholesale and retail data shows that petrol is currently overpriced by around 7p a litre, although the price of diesel is likely to go up further still in the coming weeks.
“It’s worrying that retailer margin across the UK is higher for petrol than it should be considering the big four supermarkets were told off by the Competition and Markets Authority for overcharging drivers by £900m in 2022. While many have voluntarily started to publish their prices ahead of being mandated to in law, we still have a situation where wholesale price changes aren’t being fairly reflected on the forecourt.
“In the last two weeks the wholesale cost of diesel has become 10p a litre more expensive than petrol, yet the gap at the pumps is only 5p. If retailers as a whole were playing fair with drivers petrol would be at least 7p cheaper than it is now, down to around 150p from its current average of 157p.
“The second recommendation from the CMA report was to set up a price monitoring body which this situation demonstrates the need for as some retailers are clearly inflating the price of petrol. The setting up of this body cannot come soon enough, as long as it has some form of teeth to keep retailers in line.”