Pump prices at two-year high fuel UK inflation
UK’s highest inflation rate for two-and-a-half-years has peaked at 1.6% largely
due to higher fuel prices.
RAC Fuel Watch spokesman Simon
Williams said: “The price of petrol and diesel reached a two-year high at the
beginning of February and has remained at this level with average
forecourt prices of £1.20 for unleaded and £1.22 for diesel - the highest price
we have seen since December 2014.
“While the price of oil has
gone up the weaker pound has been a major factor in the pump prices increasing
as all fuel is traded in dollars, including fuel produced in the UK. As a net
importer of fuel the UK is at the mercy of the international exchange rate.
“Since the June 2016
referendum we have seen approximately 8p per litre added to fuel prices of
which over 4p can be attributed to the impact of the collapse in the pound
against the dollar. This combined with a steady increase in the price of oil is
a double whammy for drivers pushing up UK pump prices.
“The OPEC oil producing
countries have remained bullish about their commitment to production cuts and
their eagerness to stand by them. Compliance certainly seems to be holding and
Saudi Arabia has described them as the deepest cuts in more than eight years.
This will maintain upward pressure on oil prices and we are unlikely to see any
relief for six months or more as US shale oil producers gear up their own
“Motorists will fear any
further statements which undermine confidence in the pound as this will have an
immediate and decisive upward impact on fuel prices which represents a
significant proportion of their household budgets.”