Motorists will be feeling the pinch as petrol and diesel prices reached their highest levels in three years.
Prices of both fuel types rose by more than 2p per litre in November, according to motoring organisation the RAC. Unleaded petrol rose from 118.43p to 120.78p – a 2.35p rise, while diesel rose from 120.96p to 123.18p – a rise of 2.22p.
Filling a 55-litre family car with unleaded now costs on average £66.43, up £3.55 from unleaded’s 2017 low point in July. A tank of diesel has risen by even more – it now costs £67.75 up by £4.50 since July.
The increases reflect the market price of a barrel of oil which has stayed consistently above $60 in November. The RAC does say, however, that the strengthening of Sterling has in fact saved motorists from more severe price rises. The pound started November at $1.32 against the dollar and finished the month at $1.35, a 2% rise.
RAC fuel spokesman, Simon Williams, comments: “Even though the oil price is now consistently above $60 a barrel, the increased value of sterling against the dollar is helping to keep fuel prices down at the pumps. This is good news for motorists as it means petrol and diesel prices are unlikely to shoot up, in fact we may even see them come down very slightly in the next week or so.”
‘Forecourt prices unlikely to go shooting up’
At the end of November, members of the Organisation of the Petroleum Exporting Countries (OPEC) met to discuss their oil level productions.
The organisation acts as a cartel to restrict the flow of oil and therefore maintain higher and more stable prices.
At the meeting, the group agreed to extend a production cut, which has been in place for more than a year. Prices fell to a low in January 2016 of $26 thanks to a glut in oil production from US shale oil producers.
Mr Williams adds: “The market had been expecting OPEC to extend its production cut until the end of next year so after an initial rise in the price of oil during the day of the meeting, things cooled down.
“The price we will pay for fuel at the pump into 2018 very much hinges on how effective OPEC’s production cut continues to be in reducing the global glut of crude oil. The increased barrel price this is designed to create may also work against the group as it makes fracking for oil in the US more financially viable, which in turn may lead to America increasing its production and filling the gap from the cuts. If this happens it should mean forecourt prices won’t go shooting up.”