The average price of petrol and diesel rose for the second consecutive month in July, adding nearly £2 to a fill up, according to RAC Fuel Watch.

Unleaded petrol rose by 3.21p a litre from 111.06p to 114.27p, which sent the cost of a 55-litre tank to £62.85 – an increase of £1.77.

Diesel went up by a similar amount – 2.95p a litre – from 115.09p to 118.04p, making a complete fill-up £1.62p more expensive at £64.92.

The price of oil was stable throughout July finishing at $42.95 a barrel, a similar figure to the beginning of the month.

The wholesale price of petrol fell 2p across the month to 84.66p a litre, signalling that retailers should be reducing their pump prices slightly in the next week or two. Diesel also came down but only very slightly (0.22p) to 87.39p.

Asda is the cheapest supermarket

At the big four supermarkets, the average price of a litre of petrol increased by 3.43p to 109.14p and diesel by 3.33p to 113.52p.

Asda was the cheapest supermarket for unleaded petrol by the end of July at 108.63p a litre, with the others all averaging at just over 109p a litre.

Asda also had the lowest price diesel at 112.68p, ahead of Sainsbury’s on 113.39p. Morrisons and Tesco were both at 114p.

Fuel prices could fall

Simon Williams, RAC fuel spokesman, said: “July was another bad month for drivers with a 3p a litre rise in the price of fuel. This means petrol’s 7p a litre more expensive than it was at the end of May (107p on 31 May) and diesel is 6p more (111.86p on 31 May), something drivers will no doubt have noticed as each complete fill-up is costing almost £2 more.

“The higher prices at the pump have been driven by the cost of oil increasing steadily to around $42 a barrel from a low of $13.21 in April. But drivers may well be given some respite as oil producers are planning on ramping up production despite the risk of renewed lockdowns around the world.

“This could easily lead to supply outstripping demand and therefore a reduction on the forecourts of the UK. As it there is some scope for retailers to already be reducing their prices. If they play fair with drivers we ought to see 2p a litre come off the price of unleaded and nearer 4p come off diesel.”

Dan Hutson, head of motor insurance, at Comparethemarket.com, said: “The pandemic has put huge financial strain on many drivers across the UK. While premiums have fallen significantly during lockdown – over £50 in the last quarter – the increase in fuel prices seen today could well eradicate those savings.

“The cost of fuel has been fluctuating a lot this year and indications are that we may see a reduction in costs in the months ahead. But this will do little for those that are already struggling with the cost of running a car, whether that’s affording their car insurance payments or covering the cost of petrol.”