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Fuel prices set to soar as political uncertainty looms

Purse strings could be squeezed even further as experts predict a hike in fuel prices in coming weeks.

Political uncertainty looms as Donald Trump announced plans to pull out of the Iran nuclear agreement which could see prices at the pumps rise by at least 2p per litre over the next fortnight.

RAC fuel spokesman Simon Williams said: “The price of oil has already jumped to $77 a barrel on the back of this news. The last time oil was this expensive was in November 2014 when prices were falling due to OPEC's decision to oversupply the market.

“Unfortunately, the situation now is very different as supply is being curbed and the pound is far weaker ($1.35 v $1.57) which makes fuel more expensive as, like oil, it's traded in dollars. This is potentially a toxic combination for motorists as it will inevitably lead to price rises on the forecourt.

"Drivers are already suffering as last month saw almost 3p a litre being added to the average price of petrol and diesel making it the worst monthly fuel price rise since December 2016. If another couple of pence a litre goes on as a result of the higher oil price and the fact the pound is at a four-month low could take the average cost of a litre of unleaded to 126.5p - a price last seen in October 2014 - which would make filling up a 55-litre family car cost nearly £70.

"Sadly, the days of petrol and diesel for under a pound a litre in early 2016 are fast becoming a distant memory."

Similar views were echoed by Brian Madderson, chairman of the Petrol Retailers Association (PRA).

He said: “The merging of UK fiscal and global oil trading issues has placed great pressure onwholesale costs for retail road fuel as reported by Platts. Average costs have risen by nearly 6.00ppl since Easter and there is no immediate softening in sight. “Although pump prices have had to rise to reflect such dramatic increases, we are still moving towards 130ppl at the pumps - levels not seen since Autumn 2014 and 30% higher than January 2016.

"This is going to hit motorists hard and add to inflationary pressures across the faltering economy. The worst outlook of above $100 oil could send pump prices towards the record levels of 142ppl for petrol and 148ppl for diesel reached in April 2012”.

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Posted on 14th May 2018 at 1:19 PM

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