Why Are Fuel Prices Rocketing?

Wed 7th Apr 2021

Motorists who are looking to return to some sort of normality in their cars as lockdown is eased could be set for a shock at the fuel pump with news that petrol has risen by 12.2p per litre in just the last five months.

A significant rise in wholesale fuel prices throughout February has been a major contributory factor in the jump, with retailers putting their prices up on almost a daily basis. But analysts are warning that with more and more drivers getting back on the road prices could rise even higher. A slump in demand and a strong pound have kept petrol prices down a little in 2021, but the RAC is warning that the coronavirus pandemic hit the fuel industry hard and there may be a bite back.

With fewer journeys made last year, demand slumped by a record 8.7billion litres, the equivalent of no vehicles visiting a petrol station for almost 10 weeks, this dip saw some fuel retailers selling petrol for less than £1 a litre. But prices are now back at the same level they were pre-pandemic and retailers might look at cash in as motorists get back on the roads.

“Pump price rises seem a little unrelenting at the moment with March being the fifth successive month where prices went up,” said Simon Williams the RAC’s fuel spokesman.

“This is very frustrating for drivers who are now starting to use their vehicles more with the easing of the national lockdown. 

“They're unfortunately suffering the effects of the rise in wholesale fuel prices that took place in February which led retailers to increase their forecourt prices almost daily throughout last month.

“The situation isn't as grim as it could be though as the combination of a relatively strong pound and an oil price that is pegged back by lower global demand as a result of the pandemic mean wholesale prices are still lower than they otherwise would be.”

The RAC advise that supermarkets are still the most affordable place to get your petrol, with Asda leading the way with a litre of petrol 6p cheaper than the national average at 120.99p-a-litre.