Soaring prices ‘here for a while’ – when will petrol costs come down? Expert prediction

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The cost of filling up a typical family car is now greater than £100 on average across the British Isles. Price rises have forced motorists to consider if and when they can afford to fill up their vehicles. Unprecedented levels of inflation and energy bills are further compounding finances for many Britons.

A litre of petrol now costs 187p on average, while diesel fetches 193p per litre, according to data from the RAC Fuel Watch.

The Government has raised concerns that high prices are being made worse because a 5p fuel duty cut is not being passed on quickly enough by forecourts to motorists.

To investigate whether the measure is being adhered to, business secretary Kwasi Kwarteng has asked the Competition and Markets Authority (CMA) to begin an investigation.

Many Britons will be curious to know when petrol prices will start to fall. spoke with Andrew Black, principal at Efficio, for his prediction as to what we can expect.

He said: “In the short-term, there is nothing to suggest petrol prices will come down.

“The combination of under-investment in new capacity before and, especially, during Covid, a rapid rebound in demand since the relaxing of Covid lockdowns, and uncertainty created by Russia’s invasion of Ukraine means that high prices are likely to be here for a while.

“In addition, whereas in the past it was usually possible for the big producing countries to turn on the taps and increase supply, the reality is that with global oil demand now approaching 100m barrels per day, there are few countries left with the ability to act as the ‘central bank of oil’.

“The US has started releasing oil from its strategic reserves and has also announced that it will ease sanctions on Venezuela to allow more oil exports from that country.

“Similarly, President Biden has announced a visit to Saudi Arabia, a country that he once labelled a ‘pariah’, to encourage the Saudi Government to increase oil production.

“Some commentators have also suggested the US could turn a blind eye to more exports from Iran, despite the sanctions in place on that country, due to its efforts to develop nuclear weapons.

“Nevertheless, even if all of these efforts bear fruit it is unlikely that prices will drop quickly, particularly given that demand in many countries continues to increase despite higher prices.

“Experts are divided on how high oil prices could go and when they will eventually drop but readers of the Express should be ready for petrol to breach £2 per litre in the next few months and to stay there until at least the end of the year.”

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Why have petrol prices been rising?

Fuel prices have been growing rapidly since the turn of the year due to several factors.

Many businesses around the world have been able to return to normal operating procedures now most global Covid restrictions have been removed.

Russia’s invasion of Ukraine has also helped to push petrol prices higher.

Moscow is one of the largest oil exporters in the world and it is being targeted by economic and trading sanctions.

These have helped to create potential supply concerns, pushing up oil prices.

Crude oil prices and the dollar exchange rate play a significant role in determining prices at the pump, as crude oil is traded in dollars.

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