The cost of filling up a typical family car has already risen by nearly £6.50 in the last seven months
Motorists face inflation busting rises in the cost of petrol and diesel as the oil price soars and the pound sinks, industry experts warned last night.
The cost of filling up a typical family car has already risen by nearly £6.50 in the last seven months after unleaded jumped from around £1 a litre to more than 113p.
But the Petrol Retailers Association (PRA) said drivers should brace for prices at the pumps to rise by another 5p a litre by the end of the month – adding a further £2.75 to a tank of fuel.
Fuel prices have been pushed up by the rise in oil which hit a one-year high above $53 a barrel yesterday.
With oil priced in dollars, the fall in the pound has added to the wholesale cost of unleaded and diesel for UK buyers, pushing up prices on British forecourts even further.
The RAC described the rise in the price of oil and fall in the pound as a ‘double whammy’ for motorists.
Campaigners are now calling for fuel duty to be cut to ease pressure on family finances and businesses.
Brian Madderson, chairman of the PRA, said: ‘Motorists can expect increases of up to 4p or 5p per litre by the end of the month unless there are favourable corrections to the exchange rate and to global oil prices. This will also increase UK inflation rates.’
The PRA has written to Chancellor Philip Hammond calling for fuel duty to be cut from 57.95p a litre to 55p a litre in the Autumn Statement next month.
‘This would be an extremely popular and valuable contribution to ensuring consumer spending does not start to fall away and damage business prospects as the new Government grapples with the aftermath of Brexit,’ said Mr Madderson.
RAC fuel spokesman Simon Williams said: ‘The unexpectedly sharp fall in the value of the pound will make the wholesale price of fuel go up. Sadly, it’s also happened at a time when the oil price appears to be rising again so the combined effect will be bad news for motorists.
‘This is a double whammy for motorists. We’re likely to see the price of both petrol and diesel increase by around 3p a litre in the next fortnight.’
He added: ‘With the pound now worth so much less, there can be no other outcome than an unwelcome increase at the pumps from the current national averages of 113p for petrol and 114p for diesel.’
The pound fell back below $1.24 yesterday having been trading at around $1.50 before the EU referendum.
A ‘flash crash’ last week sent sterling tumbling below $1.20 before it recovered.
HSBC has predicted that the pound could reach $1.10 by the end of next year.
Campaigners are now calling for fuel duty to be cut to ease pressure on family finances and businesses
Analysts said the fall in the pound has helped support the economy following the Brexit vote by boosting exports and tourism and making Britain more competitive on the global stage.
By contrast, the eurozone has remained in crisis in recent years, because of the one-size-fits-all single currency that has punished recession weary countries such as Greece.
‘It’s the lack of currency flexibility that has been one of the fundamental problems that Europe has,’ said Derek Halpenny, economist at Bank of Tokyo-Mitsubishi. ‘The flexibility of exchange rates is the big positive that the UK has going forward.’