Sterling slump hits fuel prices
"The unexpected crash in the exchange rate for the Pound for the US Dollar, from US$1.58 to 1.48, in just four weeks from mid-June is hitting wholesale fuel costs", said Brian Madderson, Petrol Retailers’ Association (PRA) chairman.
Brent Crude price has increased by US$3/barrel due to the new Middle East uncertainty following events in Egypt and this has resulted in price at the pump increasing by 1.00ppl.
However the real culprit for the rise in fuel costs this time is Sterling which accounts for 3.00pence per litre (ppl) of the overall 4.00ppl increase seen on forecourts.
Brian Madderson commented “The new Bank of England Governor, Mark Carney, shoulders some blame for recently indicating that UK interest rates will remain low, contrary to market expectations. This combined with the poor UK manufacturing data this week and the US promise to let Quantitative Easing taper off this year, provide good reason for operators to flee Sterling.
“This is at least fully transparent if still unwelcome news for motorists, businesses and UK inflation as the economy struggles to rebound.
“We now expect the average price for petrol to surge towards 140ppl and diesel to 144ppl just as the school holidays spark the start of the summer driving season.”