Drivers may not have long to take advantage of fuel costs below Â£1-per-litre as wholesale costs rise again, a report warns.
Motorists are being warned that the recent plunge in fuel prices could be over – for now – as oil costs hover well above 12-year lows seen just a fortnight ago.
The RACÂ said it expected the cost of both petrol and diesel at the pumps to start to rise soon following seven consecutive months of average falls in petrol costs as world oil prices collapsed.
The average cost of diesel in January stood at 101p-per-litreÂ – a fall of 5p on December’s figure – while petrol was down to 102p-per-litre, according to the motoring organisation’s Fuel Watch figures.
That was despite supermarkets selling fuel below Â£1, the RAC said.
Separate statistics by Experian CatalistÂ suggested wholesale prices were already rising, with average unleaded costs averaging almost 103p on Monday while diesel prices nudged up too.
The price of fuel is largely determined by oil prices – though other factors include taxation shifts and refining availability.
A record worldwide glut has combined with a global economic slowdown to drive Brent crude prices down from a peak of $115 a barrel in 2014 to just above $32 today.
However, Brent costs were at 12-year lows of $26 just two weeks ago.
A refusal by major oil producers to cut production – for fear of losing market share – has contributed to the oversupply but market forecasts suggest demand is likely to pick up later this year – a view supported byBP’s chief executive in an interview with Sky News.
The RAC said while it expected the volatility in the oil price to continue, fuel prices were likely to reflect the bounce back from January’sÂ low point.
Its fuel spokesman, Simon Williams, said: “Motorists have seen petrol and diesel prices reach their lowest points since 2009.
“January saw the oil price go into free-fall with talk of a barrel dropping to $20 and possibly even to $10 dollars, but since the low of $26 a barrel the market has started to creep back up.”
He added: “However, the oil market is notoriously volatile, even in more stable economic times, so it’s still possible that the price could drop back again.”