Fuel prices ‘could reach five and-a-half year high’

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Fuel prices could reach a five-and-a-half year high as there is “no end in sight” to the rising cost of filling up, a motoring firm has claimed.

The RAC warned that 2018 is “rapidly becoming a horrible year on the UK’s forecourts” and described the prospect of further increases as “inevitable”.

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Government figures show the average cost of unleaded is £1.30 per litre, while diesel stands at £1.34 per litre.

Fuel has not been this expensive since summer 2014.

The price of oil - which is a key influence on the cost of fuel - was around 106 US dollars per barrel back then, and stands at almost 80 US dollars today.

But the decline in the value of sterling over the same period - from 1.70 US dollars to 1.29 US dollars - means it is expensive for retailers to buy fuel on the wholesale market despite the low oil price.

The cost of filling a 55-litre family car with unleaded has risen by £7.32 over the past 12 months, according to the RAC. For diesel, the cost has risen by £8.19.

RAC fuel spokesman Simon Williams said: “August was another bad month for motorists and it’s rapidly becoming a horrible year on the UK’s forecourts and it looks like further increases are inevitable.

“Having benefited from some very low prices two-and-a-half years ago, drivers get a nasty shock every time they go to fill up their cars, having to fork out more and more.

“While it’s clearly a tough time for regular motorists, unfortunately there is currently no end in sight to the rising cost of fuel.

“With the pound at such a low against the dollar, and fuel being traded in the US currency, it will only take a moderate rise in the price of oil for some eye-wateringly high prices to be seen at the pumps.

“With many factors at play on the global oil market, the price of a barrel could easily break through the 80 US dollar mark and stay there.

“If this were to happen it would be dire news for drivers and we could even see pump prices heading towards the record highs of April 2012 when petrol hit an average of 142p a litre and diesel 148p.”