Will Petrol Prices Rise in the New Year?

Brexit saw the pound drop to the lowest rates against the US dollar seen in almost 30 decades. Now, economic analysts are warning that Brits could be set to endure another blow, with petrol prices expected to rise by up to 9p a litre in the New Year.

The dire forecast comes in the wake of OPEC (Organisation of Petroleum Exporting Countries) talks to cut production, and slash output by 1.2 million barrels. It’s part of a plan to end the glut of cheap oil that’s flooded that market, and push prices back up to US$60 per barrel.

While it’s good news for OPEC and oil investors, the AA has warned that British drivers could be forced to fork out an extra £5 when filling up the tank of a family hatchback. This would raise the average cost of filling a tank from £62.68 to £67.68, which could hammer the budgets of the UK’s 32 million motorists.

British households set to tighten belts

The weak post-Brexit pound is already putting stress on British households, with AA spokesman Luke Bosdet maintaining that the dramatic move has come at the worst possible time. Drivers on a budget will either need to reduce their vehicle use, cut back on other expenses or find a way to cover the extra cost of filling up the tank. 

“With winter motoring, cars consume more fuel as they have to work harder in the cold and there’s more strain on the electrics like heaters being on full blast,” he comments. He didn’t mince his words, adding “A long spell of higher prices, aggravated by a weak pound, could knock a sizeable hole in family spending. This will hurt.”

An unwelcome Kris Kringle

While a supermarket price war gave Brits a chance to knock 2p a litre off the price of fuel in November, the deal only offered short term relief. By the time school breaks up for the holidays petrol prices are expected to rise again, with RAC fuel spokesman Simon Williams warning that, “Motorists are about to have an unwelcome early Christmas present in the form of higher prices at the pump.”

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