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Petrol prices could rise if Britain votes for ‘Brexit’ – RAC

Paloma Kubiak
Written By:
Paloma Kubiak

Analysts predict that a vote for ‘Brexit’ could lead to a 20% reduction in the strength of the pound against the dollar which in turn would leave motorists paying more at the pumps.

As motorists are currently enjoying low pump prices with both petrol and diesel hitting below the £1 mark at the cheapest forecourts, The RAC predicts that if Britain leaves the European Union it would add an average of 4p per litre on fuel.

The impact on fuel prices is not likely to be as “dramatic as motorists might be led to think” but the RAC said a 20% fall in the value of the pound against the dollar would add £2 to the cost of filling up an average 55 litre petrol car, based on current exchange rates.

This would add around 4p a litre, up from 101.95p to 105.56p.

RAC fuel spokesman Simon Williams said while the RAC has no view on the UK’s membership of the EU, the impact on fuel prices of Britain leaving is not likely to be as dramatic.

“While the strength of the pound is a significant factor in the price motorists pay for petrol and diesel due to wholesale fuel being traded in dollars, the oil price is currently a greater influence.

“Despite talk of a slight curb in oil production this week the price of a barrel has remained stable. While it is notoriously difficult to predict what will happen next with oil prices, OPEC appears to be sticking with the general principles of its over-production strategy so there is little reason to expect anything to change drastically in the meantime. This means lower retail fuel prices look likely to remain with us until at least the middle of this year.”

Williams added that even if the price of an oil barrel were to go above $60, it would signal a major move away from OPEC’s strategy to maintain market share through a lower price and make it financially unattractive for the US to produce oil from fracking.