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Drivers hit by massive monthly fuel price rise in August

Written by: Emma Lunn
The price of petrol rocketed by nearly 7p (6.68p) a litre in August while diesel shot up by 8p, making the price increases the fifth and sixth biggest monthly rises in 23 years, according to RAC Fuel Watch.

The average price of unleaded petrol finished August at 152.25p – up from 145.57p at the beginning of the month, adding nearly £4 to a tank (£80 to £83.74). Diesel went up from 146.36p to 154.37p, making a fill-up nearly £4.50 (£4.41) more expensive.

For petrol, the monthly price rise has only been exceeded four times in the past 23 years: in March (11.61p), May (11.15p) and June 2022 (16.59p), after Russia’s invasion of Ukraine, and October 2021 (7.43p).

Diesel’s increase was the sixth biggest since 2000. It went up more in March (22.06p), June (15.62p) and October (10.14p) last year, as well as in October 2021 (8.16p) and May 2008 (8.43p) which was shortly before oil hit its record high price of $144 a barrel.

The rising prices at the pumps have been caused by the increasing cost of oil, which has gone up nearly $12 since the start of July to nearly $87 ($86.86) a barrel, due to producer group OPEC+ reducing supply.

This has led to the wholesale cost of fuel – the price retailers pay – going up, which in turn has been passed on to drivers on the forecourt.

Whether prices continue to go up in the coming weeks remains to be seen, with concerns about the health of the Chinese economy and the end of the summer driving season in the US both having the potential to limit further rises.

RAC: ‘August a big shock for drivers’

Simon Williams, RAC fuel spokesman, said: “August was a big shock to drivers as they had grown used to seeing far lower prices than last summer’s record highs. Seeing £4 or more go on to the cost of a tank in the space of just a few weeks from a pump price rise of 6-7p a litre is galling, particularly for those who drive lots of miles or run an older, less fuel-efficient car.

“While the increase is clearly bad news for drivers, it could have been far worse had the biggest retailers not let their inflated margins from earlier in the year return to more normal levels as wholesale fuel costs went up.”

Wholesale costs for both petrol and diesel started to rise in late July on the back of oil hitting $85. However, the RAC said that under pressure from the Competition and Markets Authority’s investigation, retailers’ margins have returned to closer to their longer-term averages.

“All we can hope is that this move by many big retailers back to fairer forecourt pricing remains when wholesale costs go down again. Only time will tell,” added Williams.

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