Petrol retailers warn of fuel price increases following Hurricane Harvey
Fuel prices in the UK will rise following the devastating impact of Hurricane Harvey on the Texan coast, according to the Petrol Retailers Association. Brian Madderson, chairman of the PRA, explained that UK wholesale prices had increased immediately as the storm hit the region.
“The wholesale price of petrol has increased by over 4.20ppl in just the last 5 days, with no major variations to the £/US dollar exchange rate this week and relatively stable prices for Brent Crude, this massive wholesale price hike can only be ascribed to the events in Houston. Across this coastal region, refineries have closed and oil rigs in the Gulf of Mexico have shut down, but it is still sobering that UK wholesale prices have been affected quite so quickly,” Madderson states.
The PRA has been in contact with Platts, independent provider of information and benchmark prices for the commodities and energy markets, and they confirmed that “there have been a large number of oil tankers set to move to the US from Europe carrying gasoline to make up shortfalls in the Gulf region, therefore gasoline cracks have surged to over a two-year high. Diesel has not been so affected as the UK imports over 40 per cent, mainly from Russian sources.”
Madderson continued, “Margins have been tight for some time this year so increases of this magnitude will have to be passed on at the pump rather quickly. Average prices for petrol this week have been 117.3ppl [prices from Experian Catalist] and one can now see averages above 120.0ppl gripping the market as we move into September. This will be bad for UK inflation, for cash strapped UK motorists and for the economy as money is diverted from other purchases.”
The PRA added its advice to the Chancellor of the Exchequer that considering fuel duty increases in his Autumn Budget “would be unwise… if he really wants the UK economy to avoid any recessionary trends.”