“The double impact of the pound weakening against US$ and global oil prices strengthening will cause pump prices to move sharply upwards,“ said Brian Madderson, chairman of the Petrol Retailers Association (PRA).
“The pound has now fallen by over 15 per cent to $1.24 since the pre-Brexit level of $1.47 and dropped even more alarmingly last week to just $1.15 in the ‘flash’ trading which started in Asian markets. Fortunately it recovered quickly but there are City analysts talking about even lower levels to come including parity with US dollar.
“At the same time, renewed talks amongst OPEC members’ trying to curb oil production has led to a hardening of global oil prices with Brent Crude passing the psychological barrier of $50/barrel. “As a result, Platts wholesale costs to retailers have increased by over 6ppl for petrol and 7ppl for diesel in the last few weeks, whereas the UK average pump prices have moved up by less than 2ppl for both grades over the same time period.
“Thus motorists can expect increases of up to 4 or 5ppl by the end of the month unless there are favourable corrections to the exchange rate and to global oil prices. This will also increase UK inflation rates.
“The PRA has written to the Chancellor advising that the Government should support the economy in the face of such fuel cost increases by reducing Excise Duty in his Autumn Statement from 57.95ppl to 55.00ppl. This would be an extremely popular and valuable contribution to ensuring consumer spending does not start to fall away and damage business prospects as the new Government grapples with the aftermath of Brexit.”