Petrol prices are likely to fall back from record levels due to the costs of wholesale fuel and global oil easing, UK motoring groups have said. The average price for a litre of petrol hit £1.63 on Sunday after rising above £1.60 for the first time last week.
Oil prices soared after Russia invaded Ukraine, with the price of Brent crude oil-the global benchmark for prices hitting a nearly 14-year high at one point. However, in the past few days, the price of oil has dropped as fears that the European Union would follow the US and Canada in banning Russian oil have eased. The RAC said drivers would have to stomach probably more rises this week, but added they "should soon get some respite from pump prices jumping by several pence a litre every day as oil and wholesale prices appear to have settled". "The price hikes seen over the weekend are still a result of the oil price rise which began at the start of the month and peaked early last week at $137 a barrel," said RAC fuel spokesman Simon Williams.
The reason higher prices at the pumps are likely to remain despite falling commodity prices is due to the way retailers buy the fuel and the time lag between purchasing at a certain price and then selling it on. Luke Bosdet, the AA`s fuel price spokesman, said a 10.6p-a-litre slump in wholesale petrol costs on Wednesday and Thursday last week, followed by oil's fall in value, had produced "bizarre price anomalies". Mr Bosdet said weekends were the busiest time for forecourts and the rush by drivers to beat further potential price increases had pushed up demand, which had actually led to even higher prices at the pumps as stations had to resupply at a faster rate.
But the price of Brent crude dropped in recent days, due to reduced fears of a European ban on Russian oil, and also partly due to speculation that extra supplies could come onto the market from Iran, Venezuela and the UAE.