US STORM FORCES UP THE PRICE OF PETROL
Closure of Texas refineries hits UK drivers
THE price of unleaded petrol is set to hit its highest level in more than two years due to Hurricane Harvey, it was warned yesterday.
The RAC predicted forecourt prices could rise by up to 4p per litre in the coming days because of the shutdown of large refineries on the US Gulf Coast.
This would take the average price over £1.21 per litre, making unleaded more expensive than diesel for the first time in more than a year.
It also would be the highest price since December 2014, hitting hardpressed families in the pocket.
A 4p rise in the cost of unleaded would add £2.20 to the cost of filling up a 55-litre tank in a typical family car. The average price of a litre of
unleaded was 117.29p on Thursday, with diesel costing 118.4p.
The RAC said it expected diesel to remain stable at around 118.5p. RAC spokesman Pete Williams said: ‘This will be the first time unleaded has been higher than diesel since June 2016.
‘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 United States’ immense appetite for gasoline.’
One quarter of the refining capacity in the US is out of action, leaving a shortfall of more than four million barrels a day. This has helped push up the wholesale unleaded price by 5p in the last week.
Mr Williams 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.’
Two major fuel pipelines in the US have been restricted or stopped because of flooding, and drivers in Dallas had to queue to fill up their vehicles as some petrol stations ran dry.
At least 39 people were killed in the destruction caused by Hurricane Harvey. In Texas more than 37,000 homes were heavily damaged and nearly 7,000 were destroyed amid major flooding.
But yesterday the AA said the wholesale price of unleaded is likely to fall quickly again – citing the case of Hurricane Katrina in New Orleans in 2005.
It said it would be watching fuel retailers ‘like a hawk’ to ensure that they cut prices quickly when wholesale costs fall.
Retailers are often criticised for being quick to raise prices when wholesale costs go up, and slow to slash prices when wholesale costs drop.
The AA’s fuel price spokesman Luke Bosdet said: ‘Although the wholesale price of petrol has gone up 4p a litre in three days, it is likely to fall off just as quickly.
‘That was the experience with Hurricane Katrina, a far more destructive hurricane, in 2005. Shortly after Katrina went away, the wholesale price fell 4p a litre but it took two months for that decrease to be reflected at the pumps.
‘Other than needless panic buying – most drivers fill up once a fortnight – the real damage in 2005 was done by greedy fuel retailers.
‘This started the charge that forecourt prices shoot up like a rocket and fall like a feather – which the industry denies.’
In January this year, petrol soared to a two-year high – adding nearly £10 to the price of filling up a typical family car.
A litre of petrol cost an average of 119p following the rise in the price of oil, the AA said. That compared with a low of 102p a litre early last year.
‘Up 4p a litre in three days’