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