Cash-strapped hauliers fighting to stay afloat amid already high pump prices are being warned to brace themselves for another rise in diesel costs due to continuing conflict in the Middle East.
According to the Petrol Retailers Association (PRA), ongoing geo-political tensions in the region have prompted speculation by oil traders, which in turn forced the price of Brent Crude oil to a six-month high of US$115.65/barrel in August.
The main cause for concern for traders is the unrest in Syria, which is provoking possible military action by Western governments. Added to that are continuing difficulties in Egypt, threats from Iran and domestic disorder in Libya, which the PRA said have all combined to make the essential oil sources for much of Europe look increasingly at risk.
“The PRA forecasted the crude oil rise in August,” said Brian Madderson, PRA chairman. “As expected, this is a grim outlook for retailers, businesses and motorists across the UK.
“Since August 8, the Platts based wholesale cost of petrol and diesel has risen by 3p per litre (ppl) and it is likely there are further price rises ahead.
“Independent retailers buying on a daily basis have no alternative but to increase prices at the pump, as most have no lucrative alternative business streams with which to subsidise fast rising fuel costs.”
Madderson said his Association’s predicted 5ppl increase at the pump may now happen sooner as uncertainty continues to grip the entire Middle East region. “The only positive is that pound sterling has remained firm against the US dollar, so UK fuel prices are currently not affected by poor conversion rates,” he added.
The PRA said it is urging the chancellor to temporarily reduce fuel duty as an immediate measure to prevent the UK’s economic recovery from stalling.