Good times of lower cost fuel are over, claims the RAC

THE RAC has said “the good times of lower cost fuel appear to be over” as prices hit their highest level for three years.

Drivers were likely to face more price rises over the next 12 months, the motoring group said, following an analysis of fuel costs since Dec 2014. Last month, the average price of unleaded increased for the second month running – this time by half a pence from 120.66p to 121.11p (0.45p), while diesel went up from 123.06p to 123.46p (0.4p).

It comes after the price of a barrel of oil spiked over Christmas when the chemicals giant Ineos had to close the North Sea pipeline due to a crack.

However, despite initial fears the discovery could see the price of oil soar, prices have risen less than expected. A barrel of oil has now hit $67 (£50), its highest since May 2015.

Simon Williams, RAC fuel spokesman, said: “It’s hard to see pump prices getting much cheaper in the early part of 2018. Unfortunately, the good times of lower cost fuel appear to be over and it’s probably now far more likely that we will see them going up, as OPEC’S oil production cuts are starting to have the desired effect of reducing the global oil glut and pushing the barrel price higher.”

Both petrol and diesel have increased from July, when petrol was at its cheapest point of the year at 114.33p a litre (up 6.8p) and diesel was 115.02p (up 8.4p). A tank of unleaded fuel for an average 55-litre family car now costs £66.61 – £3.73 more than it did in July. For diesel, a fill-up now stands at £67.90 – £4.64 more than in the summer.

The prices are a far cry from early 2016 when both fuels averaged 102p a litre. But they are still considerably cheaper than April 2012 when average prices of petrol and diesel reached record highs of 142p and 148p a litre.