Fuel prices have reached new highs as the worsening tension in Ukraine affects the price of oil.
Families, who are already facing a growing cost of living crisis, can expect petrol prices to hit the “grim milestone” of 150p per litre in the coming days as retailers pass on rising wholesale costs.
The RAC said the average cost of a litre of petrol or diesel at UK forecourts on Tuesday was 149.30p or 152.68p respectively, beating a previous record set only days earlier.
The price of Brent crude oil hit a seven-year high of 99 US dollars on Tuesday due to concerns over the reliability of supplies after Russian troops entered eastern Ukraine.
This has fallen slightly to 96 US dollars, but experts said on Wednesday the price is likely to rise again with the possibility of a full-scale Russian attack on Ukraine being very high.
Oil prices “entering triple digits is still very much on the cards”, said Victoria Scholar, head of investment at Interactive Investor.
Jeremy Nicholson, corporate affairs officer at Alfa Energy Group, told The Guardian: “The deterioration of the situation in Ukraine and threat of military action by Russia is adding to the risk of disruption to European gas supplies, putting further pressure on UK/European wholesale gas and power prices.
“Oil prices are also being affected, with growing expectation oil could shortly reach or exceed 100 dollars a barrel.”
Russia is the world’s second-largest oil exporter after Saudia Arabia and the top producer of natural gas. Although the UK does not import as much Russian oil or gas as other countries in Europe, experts are concerned that constricted supply could drive up wholesale prices worldwide.
Former National Grid boss Steve Holliday told Radio 4’s Today programme on Wednesday: “For the UK, it’s a price issue, it’s not a security supply issue.
“We already know that we’ve got consumers that are already experiencing huge jumps in their energy bills, so this is really very unwelcome.”
Petrol and diesel prices in the UK have been climbing since 13 February, when both were at 148.0p and 151.57p respectively.
RAC fuel spokesperson Simon Williams said: “Another day and another new record for both petrol and diesel prices. Petrol is sadly creeping ever closer to the shocking landmark of £1.50 a litre.
“Oil topped 100 dollars a barrel yesterday and is very likely to stay there due to the situation in Ukraine, coupled with production still not being able to catch up with growing global demand as we emerge from the pandemic.
“With a tank of petrol now costing over £82 and diesel nearly £84, drivers will be wincing every time they go to fill up. And those on lower incomes who rely on their cars will be starting to suffer.”
Russia’s former president Dmitry Medvedev recently warned that European gas prices could soar after Germany’s decision to halt the Nord Stream 2 pipeline. He tweeted: “Welcome to the new world where Europeans will soon have to pay €2,000 per thousand cubic metres!”
However German economy minister Robert Habeck said on Wednesday that his country could get enough gas without Russian imports. “The possibility that Germany gets enough gas and resources beyond Russian gas imports is there,” he said.
