Fuel Prices Stabilize After 43 Days of Increases, RAC Reports

According to the latest data from the motoring group the RAC, petrol and diesel prices have plateaued after a 43-day streak of rises. This halt follows a temporary pause in hostilities in the Gulf, which has eased pressure on crude oil costs. However, the prices remain notably elevated compared to pre-war levels.

Global Oil Market Shifts Influence Fuel Costs

The reduction in crude oil prices, driven by the Gulf ceasefire, has led to a decline in wholesale fuel costs. Despite this, the average petrol price now stands at just over 158p per litre, up from 133p in late February. Diesel, meanwhile, has climbed from 142p to 192p, as reported by the RAC.

Strait of Hormuz Closure Sparked Price Surge

Earlier price spikes were linked to the US-Israeli conflict with Iran, which disrupted the Strait of Hormuz—a vital shipping channel responsible for transporting approximately 20% of the world’s oil and liquefied natural gas. This disruption caused global fuel prices to rise sharply.

Refining Costs and Import Dependency

Diesel continues to be more expensive than petrol due to its higher refining complexity. The UK imports roughly half of its fuel, and global demand remains robust, contributing to sustained price levels. Crude oil, being a core component of both fuels, directly affects the cost of filling up vehicles.

RAC Predicts Potential Price Drops

“Wholesale fuel costs have dropped significantly from the start of the month, so forecourt prices should begin to decline,” stated Simon Williams, head of policy at the RAC. “We expect petrol and diesel to fall by several pence per litre in the coming week.”

Williams noted that the stabilization of crude oil prices could bring relief to drivers, though the extent of the drop may depend on market dynamics.

AA Highlights Regional Price Variability

The AA emphasized that price reductions might not be uniform across the UK, describing the situation as a “pump-price postcode lottery.” Edmund King, AA president, explained that areas with competitive retailers might see adjustments, while others could remain unchanged.

Historical Pricing Practices Under Scrutiny

Previously, the motor fuels sector faced criticism for rapidly increasing prices during oil cost hikes but hesitating to lower them when prices dropped. The Competition and Markets Authority (CMA) identified this pattern in late 2022, prompting ongoing monitoring. Recent energy cost surges have intensified this oversight.

New Scheme Aids Fuel Price Comparisons

A new government initiative enables drivers to assess fuel prices across petrol stations in the UK, providing transparency in an industry known for fluctuating costs. This tool aims to help consumers make informed decisions amid ongoing market changes.