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Rising fuel price a result of weakened pound and rising cost of oil, RAC says

Thursday 03 November 2016, By Autovolo

Rising fuel price a result of weakened pound and rising cost of oil, RAC says

Rising fuel price a result of weakened pound and rising cost of oil, RAC says

The falling value of the pound and an increase in the cost of crude oil are responsible for the largest rise in the price of diesel since May 2008.

The findings were revealed in the RAC’s monthly Fuel Watch report, which found that the average cost of a litre of diesel rose by 5.17p between October 1 and the end of the month, reaching a high of 118.65p per litre.

The cost of petrol was also affected, with prices rising by 4.39p per litre to reach an average price of 116.73p by the end of the month. This is the largest price hike since February 2013.

The average prices of both fuels are now at their highest levels since July last year.

RAC fuel spokesman Simon Williams said: “October 2016 was a historic month for UK pump prices but – sadly for motorists – for all the wrong reasons.

“The effects of the weak pound have really been felt on the wholesale market, and this, combined with an oil price at nearly double its lowest level in 2016, has put significant upward pressure on wholesale fuel prices. Retailers have had no choice but to reflect these dramatic increases in the prices they charge at the pumps.”

However, Williams was optimistic that prices may level out or drop in November.

“There are some indications that November might not shape up so badly,” he commented.

“OPEC, which represents some of the world’s biggest oil producers, recently agreed in principle a cut in production. This would mark a move away from the over-production strategy that they have employed for so long, and mere talk of a cut has been enough to force oil prices higher. But a final deal is still to be agreed at an OPEC meeting at the end of this month and, with some analysts suggesting a deal might yet stall, this leaves open the prospect oil prices might stabilise or even fall before the end of the year.”