Motorists in the UK could soon feel the effect of price rises at the fuel pumps with experts from RAC increased costs are expected. UK road users are likely to see petrol and diesel prices rise by around 2p per litre over the next couple of weeks but prices could escalate even further if tensions spiral out of control.
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Iran accounts for 13 percent of the world’s oil reserves and the nation produces around four million barrels per day to account for 4 percent of global production.
Iran is the Organisation of Petroleum Exporting Countries (OPEC’s) second largest producer of oil with over 137 billion barrels of reserves.
Sales of crude oil account for 65 percent of Iran’s public revenues and the nation relies heavily on sales to hold up its economy.
The rise in tensions spark fears Iran’s vital oil supplies will be affected which will increase demand and cost to motorists across the UK.
Oil prices have already increased by 6.7 percent since the US assassinated Iranian commander Qasem Solemaini.
Although the price of oil is not the sole factor for determining petrol pump prices, any increases in wholesale charges are always likely to be passed onto the customer.
RAC fuel spokesman, Simon Williams said: “Increasing tension between Washington and Tehran will cause the oil price to go up as traders worry about the availability of supply. This will inevitably spell bad news for drivers at the pumps in the UK.
“It also comes at a time when the oil price was already on the rise due to a further OPEC production cut and the cooling of the US’s 17-month long trade war with China which has led to increased demand.”
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According to RAC’s fuel watch, prices for unleaded petrol currently stands at 127.24 pence per litre with diesel costing 131.85 pence per litre.
Disruption to oil supplies could see costs increase by as much as two pence per litre although the RAC urges motorists to prepare for even higher increases.
Simon Williams added: “As things stand, it looks like at least 2p a litre will be added to the price of both petrol and diesel in the next two weeks.
“If the current situation in the Middle East was to escalate however, drivers could be looking at far greater increases at UK forecourts.”
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RAC’s Fuel Watch service states the figures are unlikely to change although costs have slightly increased by around 1p per litre since the start of January.
However, the Petrol Retailers Association has told the BBC prices were due to rise anyway, a statement supported by the RAC.
Their experts say the increase is not directly because of an increase in tensions in the Middle East but determined by a piece of EU legislation.
Simon Williams added: “Unfortunately both petrol and diesel have also been subject to an annual EU renewable fuel obligation rise which has led to 1p a litre being added from the start of January.”
However, increases in the price of oil do not directly correlate to a rise in petrol prices and in some cases nations could avoid any instant price increases.
Supermarkets and retailers often buy petrol and diesel in bulk to save money and will mean any immediate oil hikes will not affect consumers overall costs.
The price of oil increased by almost 15 percent after attacks on two Saudi Arabian oil facilities in September.
Over five million barrels of oil were destroyed in the Saudi drone strike which left many fearing petrol and diesel costs could soar.
However, price increases failed to materialise and average fuel pump prices in the UK fell by just under a penny per litre.
This is partly down to Saudi Arabia’s state-owned company releasing oil reserves in the immediate aftermath of the incident to prevent widespread price rises.
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