Petrol prices continue to look disappointing for 2017

“The wholesale costs for both petrol and diesel rose by nearly 5.00ppl during the month of December, due to increasing global oil prices following on from the historic “agreement” between OPEC and key non-OPEC producers including Russia” said Brian Madderson, Chairman of the Petrol Retailers Association (PRA).

Mr Madderson continued “however, prices on the forecourt moved up by only 3.00ppl this month, so there will be pressure for further increases as we move into January. According to Experian Catalist data, the UK average for petrol has moved to over 117ppl and diesel will be close to 120ppl by the year end. These would have been higher but for the large supermarkets using very low fuel prices to draw customers to their out-of-town stores for that big “Christmas shop”.

Currently, the prospects for 2017 look disappointing, as Brent Crude has already risen to over USD57/barrel and a rise to USD60/barrel appears likely if the producers “agreement” holds firm.  Meanwhile GBP has weakened to $1.22 and over Christmas, the media had City analysts predicting significant falls towards $1.10 or even as low as $1.03 in the first half year.

Together these will hit wholesale costs and pump prices with the range 125 – 128ppl possible on forecourts across the UK by mid-2017.  This represents a massive 25 to 30% increase in just 18 months and will impact inflation and living costs. The UK is a road transport economy and this disappointing outlook does not look set to aid economic recovery.