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Gloucestershire Business News

Fuel prices rise again as retailers cash in on demand

Petrol prices rose for the seventh month in a row - making them 22p a litre more expensive on average than a year ago.

It's the biggest 12-month increase for 11 years, according to data from RAC Fuel Watch.

But the RAC says prices were higher than they needed to be and there were signs that retailers were trying to make up for lower fuel sales last year.

On average, unleaded went up by more than 2p a litre (2.24p) in May to 129.27p while diesel also increased by a similar amount (1.95p) to 131.59p.

RAC fuel spokesman, Simon Williams, said: "Looking at the wholesale price of both fuels, in normal circumstances unleaded definitely shouldn't be continuing to rise with the numbers actually pointing to the potential for a 2p reduction.

"And diesel is currently 4p too expensive which suggests retailers are using the saving in the wholesale price to help make up for lower fuel sales over the last year.

"We urge retailers not to take advantage of drivers and fairly reflect what's happening with wholesale prices on the country's forecourts."

In the seven months since the country last saw the average price of petrol fall (November 2020) petrol has increased by 15.5p. Diesel is now almost 20p dearer than at the end of last May (19.73p) after a 14.4p hike in the last six months alone.

The 22p surge in the price of petrol followed a litre dropping to an average of just 106p (105.81p) on 21 May 2020 on the back of oil plunging to $13.21 a barrel at the beginning of the pandemic. Petrol last increased by this amount over a 12-month period in May 2010.

At a price of 129.27p unleaded is now more expensive than it was at the start of 2020 prior to coronavirus arriving in the UK: a price last seen in mid-August 2019. But diesel, at 131.59p, still hasn't surpassed the 132p a litre it reached at the end of January 2020.

This means a full tank for a 55-litre family car will set drivers of petrol cars back £71.10 and diesel cars £72.37 - around £8 more than before the non-stop rises began in November.

Buying fuel at a forecourt run by one of the four major supermarket chains will currently save drivers around 4p a litre with the average price of petrol standing at 124.83p and diesel 127.36p.

The average increase in the cost of supermarket fuel mirrors the UK rise which the RAC says is not surprising as, since the pandemic, they are now responsible for selling 60% of all the fuel in the UK.

Filling up on the motorway will set drivers back 146.78p for petrol and 149.59p for diesel after 2p and 1.6p rises in May.

Simon Williams added: "After a weekend which saw millions of cars take to the roads to enjoy a sunny bank holiday and a half term away from home the price of filling up with petrol has unfortunately reached its highest point in just shy of two years.

"As always, the future of fuel prices is hard to predict more than a few weeks in advance and even more so now as the pandemic appears to have altered the dynamics of fuel retailing, with the supermarkets having an even greater stranglehold on the market.

"Drivers' fuel price fate depends on what happens with global oil production and demand. Oil producers had curbed supply due to lower demand but have been releasing more product as the travel recovery continues."

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