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Ukraine crisis may impact on fuel

Petrol pumps4/3/14

By Ian Barnsley

Motorists should expect fuel prices to rise because of the crisis in Ukraine, the RAC warns.

Fuel traders anticipating further trouble in the country have already started to buy extra stock, which will increase prices as the supply of petrol and diesel decreases.

Russian and Ukrainian troops are involved in a tense stand-off in the Crimea region of the country.

The RAC predicts the problems in Ukraine are highly likely to lead to higher oil prices and this will result in fuel becoming more expensive at our pumps. 

Prices have been low

The warning comes as drivers have got used to motoring with petrol costing less than 130p a litre on average. Prices have been low for more than a month.

The wholesale price dipped in January to around 100p a litre for petrol and 129p for diesel and retailers were able to pass the benefits to their customers.

Wholesale prices began to increase before Russia sent soldiers into Ukraine due to the weakening pound against the dollar and dwindling oil stocks.

"While savings were only small, at 129p a litre the price was 11p cheaper than it was in early March last year.

Fuel market linked to political events

This meant a saving of around £6 on a tank of petrol for an average family car like a Ford Focus and £5 for a tank of diesel," according to RAC head of external affairs Pete Williams.

"The tensions in Ukraine, brought about by Russia's unprecedented move, will unfortunately affect everyone driving a vehicle in the UK as the fuel market is intrinsically linked to major international political events," he said.

Mr Williams added: "While we can all only hope for a speedy resolution to this situation.

"From a motorists' perspective we really need the pound to continue performing well against the dollar as this could help to offset some of the inevitable price rises."

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