Petrol price rises in August were fifth biggest of last two decades, RAC says

Petrol prices accelerated nearly 7p-a-litre in August, marking the fifth biggest monthly rise in 23 years, data shows.

Diesel was also up 8p-a-litre, the sixth biggest leap, according to RAC Fuel Watch.

The average price of unleaded ended August at 152.25p – up 6.68p from 145.57p from the start of the month, adding nearly £4 to a tank.

Meanwhile, diesel shot up from 146.36p to 154.37p.

Rising prices at the pumps have been caused by oil prices rocketing. 

They have risen nearly $12 since the start of July to $86.86 a barrel, due to producer group OPEC+ – often labelled by experts as a ‘cartel’ – reducing supply.

This in turn has led to the wholesale cost of fuel – the price retailers pay – going up, which has been passed on to drivers on the forecourt.

Simon Williams, RAC fuel spokesman, said: ‘August was a big shock to drivers as they had grown used to seeing far lower prices than last summer’s record highs.

‘Seeing £4 or more go on to the cost of a tank in the space of just a few weeks from a pump price rise of 6-7p a litre is galling, particularly for those who drive lots of miles or run an older, less fuel-efficient car.’

The RAC says that concerns about the health of the Chinese economy and the end of the summer driving season in the US both having the potential to limit further rises.

It also pointed to recent Competition and Markets Authority intervention which meant rises weren’t as large as they might have been.

Mr Williams adds: ‘While the increase is clearly bad news for drivers, it could have been far worse had the biggest retailers not let their inflated margins from earlier in the year return to more normal levels as wholesale fuel costs went up.

‘Wholesale costs for both petrol and diesel started to rise in late July on the back of oil hitting $85. 

‘While the barrel price has stayed at that level throughout August, retailers had no choice but to pass on their increased costs at the pumps. 

‘Fortunately for drivers though, they have clearly been influenced by the CMA’s investigation as, all of a sudden, margins are once again closer to their longer-term averages. 

‘It appears they used the wholesale price rise to subtly cover their tracks – after all, big reductions at the pumps soon after the CMA’s findings were announced would perhaps have been far too obvious a step.

‘All we can hope is that this move by many big retailers back to fairer forecourt pricing remains when wholesale costs go down again. Only time will tell.’

The three cheapest regions for petrol are Northern Ireland, the North East and the North West.

The highest prices are found in the South East, where fuel is 4p-a-litre more than in Northern Ireland. The next highest prices are found in London and the East.

For petrol, August’s price rise was only exceeded by March 2022 (11.61p), May 2022 (11.15p) and June 2022 (16.59p), after Russia’s invasion of Ukraine, and October 2021 (7.43p). 

Diesel’s increase was also surpassed by March 2022 (22.06p), June 2022 (15.62p) and October 2022 (10.14p) , as well as by October 2021 (8.16p) and May 2008 (8.43p) which was shortly before oil hit its record high price of $144 a barrel.