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September stops the rot of petrol price increases but dark clouds hang over UK forecourts

September was a mixed month for motorists at the pumps as petrol prices stayed flat but diesel climbed by another penny to its highest point for more than four years, data from RAC Fuel Watch shows.

A late month 2p-a-litre petrol price cut from the major supermarkets prevented a further rise, with unleaded staying at a UK average of 130.66p a litre (130.75p – 3 September). Diesel, however, hit 134.41p – an increase of 0.93p a litre, taking it to its highest since early August 2014.

More worryingly, oil shot up by nearly $6 a barrel to $83.73 – the highest price it has reached for almost four years. It also stayed above $80 for the whole of the last week of September, again something that has not been seen since early November 2014. The strength of sterling, which is vital in the wholesale trading of fuel as it is purchased in dollars, improved by 1% going from $1.28 to $1.30.

RAC fuel spokesperson Simon Williams said: “Petrol drivers will be hoping that September was the month that stopped the rot in terms of rising pump prices, but this may well not be the case. A dark cloud is hanging over forecourts as oil is at a four-year high and there is lots of volatility in the exchange rate due to the increasing tension of the Brexit negotiations.

“While petrol prices were cut by 2p a litre at the end of the month due to a lower wholesale price, the biggest retailers should have been passing on those savings on a regular basis rather than saving them up for headline-grabbing cut. Instead they were almost certainly hedging their bets based on the rising oil price and the fluctuating pound. This is sadly proof that rocket and feather pricing does exist among the major supermarkets.

“Latest market indications are showing prices are beginning to go the wrong way, perhaps taking us closer to the record highs of April 2012. We believe motorists have the right to expect the biggest fuel retailers to reflect the wholesale price more closely at the pump, as they purchase more frequently and therefore can easily do this. But that means moving prices down in a falling wholesale market as fast as they put them up when wholesale costs rise.”

Supermarket and motorway service area prices

Average unleaded prices at the four major supermarkets were unchanged throughout September (127.15p on 3 September to 127.07p on 30 September) yet the wholesale price of petrol came down by more than 2p a litre over the course of the month. The price for a litre of diesel is now 131.44p – 1p more than it was at the start of the month.

Despite wholesale costs of unleaded dropping the average price of motorway petrol increased by 1.32p a litre to 149.56p. Diesel, however, increased by twice the UK average for all forecourts, going up 2p a litre to 152.46p.

The cost of filling a 55-litre family car with petrol is now £71.86, at the supermarket average this would be £69.88 and at a motorway services it would be a whopping £82.25. The diesel equivalents are: £73.93 at the UK average (134.41p); £72.29 at the supermarket average and £83.85 at the motorway services’ average.

Simon Williams added: “RAC Fuel Watch figures clearly show September was a bad month for diesel motorists – whether they are private drivers or businesses. Anyone who runs a diesel vehicle is without question feeling the pinch more now with the worst prices they’ve seen for over four years. We have now had three months of diesel price rises totalling more than 3p (3.28p) a litre which completely swallowed up the drop of 1.6p (1.57p) seen in June. Sadly, diesel is now 14p more expensive than it was a year ago (134.41p v 120.31p) but 19p dearer than the start of July 2017.

“Diesel prices generally rise at this time of year due to increased European demand for heating oil which is produced from the same ’part of the barrel’, but the higher oil price and weaker exchange rate means the effect is exaggerated.”

Regional fuel price variation

Scotland experienced the greatest reduction in petrol prices with half a penny coming off the average in September in contrast to the UK average which remained static. The South East had the most expensive petrol and diesel and Northern Ireland was the cheapest for both fuels. Despite Northern Ireland diesel being the cheapest in the UK it actually saw the biggest jump in price in the month, increasing by more than a penny to 133.20p.

Regional average unleaded pump prices

Unleaded 3/9/2018 30/9/2018 Change
UK average 130.75 130.66 -0.09
Scotland 130.61 130.13 -0.48
London 131.45 131.14 -0.31
South East 131.77 131.48 -0.29
Wales 130.49 130.21 -0.28
North East 130.08 129.89 -0.19
East 131.16 131.07 -0.09
East Midlands 130.43 130.35 -0.08
North West 130.04 130.07 0.03
South West 131.09 131.15 0.06
Yorkshire And The Humber 129.92 129.98 0.06
West Midlands 130.29 130.41 0.12
Northern Ireland 129.60 129.76 0.16

Regional average diesel pump prices

Diesel 3/9/2018 30/9/2018 Change
UK average 133.48 134.41 0.93
Northern Ireland 132.07 133.20 1.13
London 133.86 134.97 1.11
South East 134.33 135.31 0.98
South West 133.72 134.69 0.97
East 134.01 134.96 0.95
North West 133.44 134.39 0.95
North East 132.85 133.75 0.90
West Midlands 132.98 133.88 0.90
East Midlands 133.36 134.25 0.89
Wales 133.35 134.20 0.85
Yorkshire And The Humber 132.59 133.40 0.81
Scotland 133.52 134.19 0.67

 

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