Drivers being warned of increased fuel prices amid ‘soaring global oil production costs’

The RAC are warning drivers to expect soaring costs in the coming days as the price of oil is climbing.

The wholesale cost of diesel has become 10p more expensive than petrol and it is worrying that at a time when the country is in a cost of living crisis retailers are putting up higher fuel margins.

On Saturday Israel declared that they are at war with Hamas after the militia group fired around 5,000 rockets on Saturday morning at various cities in the country and then launched a ground and air offensive.

This has therefore deepened the Middle Eastern crisis and on Monday Brent crude soared to more than 5% to $89 per barrel and then slightly edged back to $87.27.

Swissquote Bank’s markets expert said Saturday’s attack by Hamas “sent a panic wave into financial markets.”

RAC fuel spokesperson, Simon Williams, said: “In the last two weeks the wholesale cost of diesel has become 10p a litre more expensive than petrol, yet the gap at the pumps is only 5p.

“If retailers as a whole were playing fair with drivers, petrol would be at least 7p cheaper than it is now, down to about 150p from its current average of 157p.”

Williams added, “It’s worrying that retailer margin across the UK is higher for petrol than it should be, considering the big four supermarkets were told off by the CMA for overcharging drivers by £900m in 2022.

While many have voluntarily started to publish their prices ahead of being mandated to in law, we still have a situation where wholesale price changes aren’t being fairly reflected on the forecourt.”

However, taking into account the war in Israel is it expected that motorists could be facing even higher costs at the forecourts.

Ipek Ozkardeskaya, a senior analyst at Swissquote Bank, said, “Fears of a potential retaliation against Iran threaten the passage of vessels carrying oil through the Strait of Hormuz and flip the market rhetoric from a potentially slowing global oil demand to tight global supply.”

There is a real risk that the US and Iran could be pulled into the turmoil, Ozkardeskaya warned that “escalation and prolongation of Mid-East tensions could be the final straw that could bring the world very close to the brink of recession.”