Petrol and diesel prices rose by an average of 3p per litre in December, according to the latest figures from RAC Fuel Watch.
The average price of unleaded petrol rose to 117.23p per litre, up from 114.24p per litre at the start of the month. Diesel climbed from 116.56p to 119.63p per litre during December.
The price of oil rose by 11.75% to $49 per barrel in December, as a result of an OPEC deal to cut production in 2017. This has left fuel costs at their highest level since July 2015, but the RAC figures don’t suggest that garages are profiteering from rising prices.
According to the RAC, the wholesale cost of petrol and diesel rose by nearly 4p per litre last month. On the face of it, fuel suppliers simply seemed to have passed on this increase.
Prices up 13% in 2016
Petrol and diesel costs have risen significantly over the last year. The average price of a litre of unleaded has risen by 14.5p from 102.99p at the start of the year.
Diesel has risen by 13.64p from 105.99p per litre over the same period. As a result, filling a 55-litre tank on a family car costs £8 more than a year ago for petrol drivers. Diesel drivers are paying £10 more for every tank.
RAC fuel spokesman Simon Williams said:
“The rising oil price is bad news for motorists as it caused a nasty jump in pump prices in the most expensive month of the year.
“While forecourt prices rose by 3p a litre in December as the RAC predicted, they didn’t rocket as others had forecast. The big question now is how much further are they likely to go up, particularly in the long January wait to the next payday.”
What next for fuel prices?
As I’ve commented before, the price of oil isn’t the only factor that affects fuel prices. The strength of the pound against the dollar is also important, because both oil and fuel are traded in dollars. A weaker pound pushes up the cost of fuel for UK wholesalers.
At the time of writing, the RAC forecast is for petrol to average about 118p per litre in January, with diesel selling at about 121p per litre. To check the latest forecasts, visit the RAC Fuel Watch website.
To find the cheapest petrol and diesel in your area, visit our Fuel Prices page.