The price of petrol in the UK looks to be on the rise again, potentially dashing hopes that prices could dip below £1 per litre across the country.
On average, the cost of petrol has risen by nearly 2p a litre to 108.28p, according to the AA, while diesel prices have risen from an average of 113.42p at the start of the month to 115.06p.
The AA has said that it’s still possible to find fuel for 103.9p in certain areas of the country thanks to supermarket competition, but drivers have started to complain as prices are already steadily rising.
Prices still cheaper than January
However, there’s good news for road users in that petrol costs now are still marginally cheaper than the mid-January average price of 108.91p per litre, while diesel is also still slightly less expensive.
AA president Edmund King said that the rise has confirmed the suspicions of the organisation’s members, who last month said that they were sceptical of the recent plummet in oil prices.
He said: “While the focus was on the remote possibility of a £1 a litre for petrol, motorists bitten by years of severe price volatility and having a little more sense continued to drive cautiously.”
Falling fuel prices have divided opinion among forecasters as the cost of oil tumbled to its lowest point in six years early this year, with experts unsure of how long the low prices can last.
However, while the AA encouraged drivers to be realistic, the RAC claimed that fuel prices could continue to stay low for some time, meaning that motorists could enjoy lower costs throughout 2015.
An article published in the Wall Street Journal yesterday claimed that the rise in prices was simply due to the balance of supply and demand, with prices rising due to more cheap fuel being bought.
Supply and demand effect
The article also explained that with sales trends showing that drivers are increasingly buying up SUV and crossover-style vehicles, which are typically thirstier than smaller cars, this further contributes to the ‘looping effect’ of fuel costs.
A report from the Office for National Statistics released today supported this, showing that drivers in the UK used 11.1 per cent more petrol in January this year than in the previous year.
Due to the interesting paradoxes of oil and fuel costs, it’s unfortunately impossible for forecasters to accurately predict whether or not cheaper fuel prices will continue into the future.
While there is hope that oil prices will settle back down to around $50 per barrel, the AA finished by warning that “MPG misers” may still have the last laugh if prices continue to rise.