Petrol and diesel prices uncertain after July rise

Filling up a car

July saw the average price of a litre of petrol or diesel rise for the first time in three months, according to data from RAC Fuel Watch.

The price of litre of unleaded petrol rose by an average of 0.7p to 115.17p in July. Diesel motored an average of 0.73p higher to 116p. According to the RAC, these increases mean that the average cost of filling a typical 55-litre family car fuel tank remain above £63.

Supermarket fuel remained the cheapest, but even here, prices rose. The RAC data show that the average price of supermarket unleaded rose by 0.91p to 112.05p in July, while diesel edged 0.83p higher to 112.46p.

What’s next for fuel prices?

July’s price increases were largely down to a surge in the price of oil, which rose by 6% to $51.81 per barrel in July. This led to a 2% increase in the wholesale price of petrol and diesel, which is gradually showing up on forecourts. However, it’s not clear what’s likely to happen to prices in August.

The outlook for the oil market remains uncertain, with many analysts believing that the market remains oversupplied with oil. If true, this should keep a cap on fuel prices. Our view at is that the situation is becoming more finely balanced than it was. We don’t expect oil prices to fall much below $50 in the near future. They may even rise further, although this is far from certain.

The RAC’s Fuel Watch service reflects this uncertainty. At the time of writing (9 August 2017), Fuel Watch is showing “no change forecast” from current average prices of about 116p per litre.

As always, you can try and find the cheapest petrol and diesel in your area using our Fuel Price search — remember to add in the prices you pay to help others save money on fuel.

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