Price of petrol to increase?
Petrol Price Increase
The price of petrol is expected to rise by 2p a litre over the coming weeks as supermarkets pass on wholesale rising costs due to the Ukraine crisis. You may have seen the issues in Ukraine on the news recently and believed that it may not have an effect on us here in the UK, however, the price of petrol is set to increase in the next number of days due to the crisis in Ukraine.
As well as the petrol issue, car sales in the Ukraine and other parts of Europe have slowed dramatically as people no longer feel the need to dispose of their income on luxury objects such as a new car. Models and manufacturers such as Dacia and Ford are said to be the biggest sufferers as sales come to a stand still in Ukraine.
The AA have said that an increase to 132p per litre is likely and this would take petrol prices to their highest since November of last year. The only reason this is not being increased further, is due to the help of the strong pound, the AA have explained. In early March, after tensions in the Ukraine flared, oil prices rose to £65 a barrel, though after that the prices did recede, they rose again at the end of April, which has pushed up wholesale fuel prices.
A spokesman for the AA Luke Bosdet said that supermarkets in Britain so far had been holding back and putting brakes on potential increases as they were attempting to lure customers to their stores using cheaper fuel. He went on to say that supermarkets have been fighting to get people to come to them and spend, if supermarkets let the brakes off like they did last year, then the price of petrol could rise by 2p per litre.
Mr Bosdet explained that supermarkets usually passed on wholesale petrol cost rises slower than non supermarket rivals. He went on to say that fuel retailers that are non supermarket were already higher and over recent months had risen by 3p a litre.
At the pumps, petrol price is affected by the exchange rate, due to oil being traded in dollard. Mr Bosdet said that the reason customers were being shielded from more dramatic rises was because of a strong pound. If the exchange rate was as high as it was at the same time last year then petrol prices would be around 3p or 4p dearer than it currently is. He added that if supermarkets passed on the 2p expected increase per litre then prices would be slightly favourable in comparison to last year in Spring, when they were 140p per litre.