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Three months of falling pump prices come to abrupt end in October

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Written by:
03/11/2022
Drivers have enjoyed three months of falling pump prices from their recent record highs, but costs are starting to accelerate again.

The average price of diesel shot up by more than 10p a litre in October – the third biggest monthly increase on record, according to The RAC Fuel Watch.

This takes the average price of diesel from 180.37p per litre to 190.51ppl in October, adding £5 to each full tank being filled. As such, diesel drivers are now paying nearly £105 to fill up a 55-litre diesel car.

Meanwhile, the price of petrol has also increased, but by a lesser 3.71ppl, taking the average price from 162.67ppl to 166.38ppl. This means a full tank costs £2 more at £91.51.

October was a pivotal month for drivers as the gap between the cost of diesel and petrol has reached an all-time high of 24p a litre.

OPEC+ cuts cause cost spikes

The RAC explained that prices started to rise in October when oil producer group OPEC+ agreed to cut production by two million barrels a day.

This resulted in the price of a barrel going up 7% from $88.86 to $94.83, hitting a high of $97 on 27 October. This combined with the weaker pound made wholesale petrol and diesel – which is traded in dollars – more expensive. The value of the pound increased by 2% from $1.12 to $1.15.

Supermarkets added 4p to the average price of unleaded, taking the figures from 161.31p to 165.36p; while diesel jumped 9p from 178.51p to 187.54p. Motorway petrol increased nearly 8p from 182.83p to 190.48p while diesel rocketed by 12p from 192.74p to 204.24p.

‘Scary numbers in October’

RAC fuel spokesman, Simon Williams, said: “After three months of falling pump prices, October was a severe shock to the system for drivers with the unwelcome return of some scary numbers on forecourt totems. Those with diesel vehicles suffered most with 10p being added to the cost of a litre in what was the third worst monthly increase on record, but petrol car drivers also saw a 4p-a-litre increase across the country.

“Oil producer group OPEC+’s decision to cut supply has cost drivers dear. Oil came perilously close to the $100 mark – something we haven’t seen since late August. Prior to that the barrel price was well above $100 from Russia’s invasion of Ukraine at the end of February until mid-July, reaching a high of $138 in early March, which caused pump prices of both petrol and diesel to reach new peaks in late June and early July.”

Diesel price to stabilise, unleaded price has peaked

Williams said that the fear now, particularly for diesel drivers, is whether the average price of a litre is heading back to the record 199.09p which made a full tank cost more than £109.

“Looking at the wholesale market we strongly hope the price should stabilise. And those with petrol cars should actually see forecourt prices start to go slightly the other way as the wholesale cost of unleaded appears to have peaked – at least for the time being – in mid-October.

“We strongly urge drivers to make sure they always know where they can buy fuel at the lowest prices. Those who assume their local supermarket will be the cheapest may be in for a nasty surprise as the ‘big four’ are currently only a penny cheaper for petrol than the UK average. Diesel, however, is 3p a litre lower than the average when bought at a supermarket,” he said.

Williams added: “For those fortunate enough to have membership, a litre of petrol at Costco costs an average of 154p and diesel 176p – 12p and 14p lower than the UK averages. It’s interesting to see just how low fuel can be sold even at a time of $90 oil and a weak pound. Clearly, Costco’s margins are low, but they must surely still be making a profit.”

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