UK Petrol Prices Likely to Soar Ow­ing to Trop­i­cal Storm Har­vey, says RAC

The Star (St. Lucia) - - BUSINESS -

The price of petrol at UK pumps is likely to rise to its high­est level in more than two years ow­ing to the ef­fects of Trop­i­cal Storm Har­vey, mo­tor­ing as­so­ci­a­tion the RAC has warned.

Un­leaded petrol could rise in cost by 4p a litre in the com­ing days, mak­ing it more ex­pen­sive than diesel for the first time in more than a year.

Storms brought by Har­vey have led to the shut­down of US re­finer­ies on the Gulf Coast, lead­ing to a surge in de­mand for im­ported petrol. On Fri­day, it was re­ported by Reuters that the US’s largest oil re­fin­ery, at Port Arthur, south-east Texas, could re­main shut for up to two weeks by flood­ing.

The RAC said the av­er­age price of un­leaded petrol could pass 121p a litre, the costli­est since De­cem­ber 2014, af­ter whole­sale prices rose by 5p in the last week.

RAC spokesman Pete Wil­liams said: “The price of un­leaded petrol will leapfrog diesel early next week, ris­ing by up to 4p per litre as the im­pact of Har­vey and the shut­down of large re­finer­ies in the Gulf Coast drives up US de­mand for petrol im­ports.

“We could see un­leaded rise in the com­ing days to around 121p a litre, with diesel likely to stay sta­ble around 118.5p. This will be the first time un­leaded has been higher than diesel since June 2016 and we ex­pect this to be the case for some time to come, or at least un­til the US oil in­dus­try is able to get re­finer­ies back into op­er­a­tion and pro­duc­tion in the Gulf Coast re­turns to nor­mal – to meet the US’s im­mense ap­petite for gaso­line.”

About a quar­ter of US re­fin­ing ca­pac­ity is out of ac­tion, while crude oil pro­duc­tion in the Gulf of Mex­ico is down 13.5%. The price of a bar­rel of Brent crude oil has also nudged up again to more than $52.

Wil­liams said more price in­creases could fol­low if there was a pro­longed im­pact on de­mand through the on-go­ing cri­sis in Texas.

He added: “Amer­i­cans are wed­ded to their petrol en­gines and while they have been en­deav­our­ing to be­come more self-suf­fi­cient through in­creased frack­ing they are now hav­ing to buy more un­leaded from over­seas which is re­duc­ing the avail­abil­ity of un­leaded for the rest of the world.”

Flood­wa­ters have started to re­cede in Houston, Texas, but au­thor­i­ties say the cri­sis is far from over, with the storm now known to have killed at least 44 peo­ple in the state and forced 32,000 peo­ple from their homes.

Un­leaded petrol could rise by 4p a litre, its high­est level in more than two years, af­ter storm cur­tails US oil pro­duc­tion.

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