It’s bad news for diesel users as the latest RAC Fuel Watch report is forecasting diesel prices to increase throughout March. Whilst increased production of petrol is set to keep petrol prices stable, the increasing price of crude oil is expected to increase the price of diesel.
Oil prices are currently looking to rebound after the biggest fall in a decade. After dipping below $28 a barrel in January, oil prices have since grown to over $39 a barrel, driving up the cost of diesel for motorists in the UK.
RAC fuel spokesman Simon Williams said: “Forecourt prices of both petrol and diesel have remained remarkably stable in February despite the pound losing 3% of its value against the dollar and talk of an oil production cut. The oil price had been consistently around $30 for most of the month but in the last few days of February rose to around $36 – a price we haven’t seen since the beginning of the year.”
“Motorists are still benefiting from low prices at the pumps, with the supermarkets having held their petrol prices under £1 a litre thanks to a depressed wholesale price. In fact the wholesale price of petrol has fallen due to refineries scaling down heating oil production and switching instead to producing more unleaded, together with the US refining more petrol as it gears up for the American driving season which starts in May. This tends to have the temporary short-term effect of reducing the wholesale price, but this may change as demand for petrol picks up in the States.”
“While the average pump price of diesel has been cheaper than petrol since the end of January this may not last much longer due the increase in petrol production and its lower wholesale price. But the additional supply of diesel on the wholesale market brought about by greater refinery capacity in Saudi Arabia and India should mean prices remain comparatively stable for diesel motorists at the pump.”
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