UK fuel prices rise amid fears they will surge further when China reopens after Covid

Britons already struggling with the cost-of-living crisis are being warned to brace themselves for a fresh financial blow amid fears fuel prices could soon balloon. 

Soaring oil prices have already seen the cost of petrol and diesel at UK forecourts start to creep up this week. 

The average price of a litre of petrol on Monday was 148.8p – up from 148.4p the week before, figures from data firm Experian have shown.

Although this is still considerably lower than the record high of 191.5p in July 2022, industry bosses have predicted fuel costs could soon rocket further, driven by a surge of demand in China when the country reopens after its latest wave of Covid.

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Fuel prices are already on the rise. But industry officials have warned they could balloon even further amid fears soaring demand in China, when it reopens after its latest Covid outbreak, could drive up prices. Pictured are drivers at a Tesco petrol station in Slough on January 15

The RAC said the ‘slight rise’ in the average cost of petrol that’s already hit forecourts had been caused by smaller retailers ‘passing on increased costs’ when bringing in new supply.

Simon Williams, fuel spokesman for the RAC added there had been ‘no indications’ supermarkets had upped their prices – yet.  

‘We hope this will remain the case, but drivers are likely to see pump prices rise gradually this year as oil is predicted to be go up due to growing demand from China as it reopens after its Covid restrictions,’ he added.

‘But while the price of petrol has clearly bottomed out, diesel is still too expensive based on its wholesale cost.’

Diesel averaged 170.4p a litre on Monday, having fallen to 170.3p on Wednesday and Thursday last week. It hit a record of 199.1p last July.

Oil had dropped below 78 US dollars (£63.33) a barrel at the start of January but was valued at 86-88 US dollars (£69.83-71.45) last week, sparking rises in the wholesale cost of fuel.

AA fuel price spokesman Luke Bosdet said: ‘After a fall of close to 43p a litre since the summer record, drivers feared that a rebound in petrol prices would eventually happen.

‘So far, pump price averages have risen only slightly.

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Fuel prices pictured at a petrol station in Ickenham, London, on January 21

‘But today’s price is only 0.9p below the average price at the start of the Ukraine war on February 24 when pump prices surged.’

A report by competition watchdog the Competition and Markets Authority published in December said drivers were the victim of ‘rocket and feather’ pricing – when pump prices quickly reflect rising wholesale costs but are slow to fall when costs drop – in 2022.

News of the latest price rise comes as a group of 30 MPs today backed calls to introduce a new ‘pump pricing watchdog’ to tackle soaring fuel costs.

The project, coordinated by Tory MP Jonathan Gullis and Howard Cox, founder of FairFuelUK, is calling on Business Minister Grant Shapps to take action. 

Craig Mackinlay MP and chairman of the Fair Fuel all-party parliamentary group said motorists were being ‘fleeced by the fuel retailers’. 

While Howard Cox, Founder of FairFuelUK added: ‘We should be seeing fuel price signposts across the country, at least 10-20p per litre lower for petrol and diesel. The fact they are not, shows just how greedy the fuel supply chain continues to be.’