Fuel prices in the UK have increased for the fourth month in a row, with petrol and diesel prices continuing to climb, according to new analysis by the RAC.
Price Increases and Contributing Factors
- Since October 2024, the price of petrol has risen by 5p per litre, while diesel has increased by 6p per litre.
- At the end of January 2025, the average price of fuel was:
- Petrol: 139.0p per litre
- Diesel: 145.7p per litre
The rise has been partly attributed to:
A spike in oil prices in mid-January, with the cost of a barrel exceeding $80 for several days.
A weaker pound against the US dollar, making wholesale fuel more expensive for UK retailers.
RAC Concerned Over Rising Costs for Drivers
Simon Williams, head of policy at the RAC, said the price hikes have made filling up nearly £3 more expensive than it was at the start of October.
“It’s not been a good start to 2025 for drivers at the pumps with prices going up for the fourth month in a row.”
“Much depends on global oil supply and demand. While the price of oil can be notoriously volatile, some analysts predict it may drop closer to $70 per barrel, which could lead to cheaper fuel prices in the coming months.”
CMA Warns of Weakened Competition in Fuel Market
The Competition and Markets Authority (CMA) has warned that drivers are paying more than they should due to high fuel margins and reduced competition among retailers.
- Supermarket fuel margins rose from 7% in April to 8.1% in August 2024.
- Non-supermarket fuel margins increased from 7.8% in April to 10.2% in August 2024.
CMA Calls for More Transparency in Fuel Pricing
Dan Turnbull, senior director of markets at the CMA, said:
“While fuel prices have fallen since July, drivers are still paying more than they should due to stubbornly high margins.”
“We remain concerned about weak competition in the sector and its impact on pump prices.”
The CMA has recommended that the government implement measures to ensure:
- Greater price transparency, allowing drivers to find the cheapest fuel prices in their area.
- Increased competition, which could help lower prices across the UK.
What’s Next for Fuel Prices?
With uncertainty in global oil markets, the cost of petrol and diesel remains volatile. However, experts suggest prices may begin to ease if oil stabilizes at a lower price.
For now, UK drivers are being advised to shop around for the best fuel prices and keep an eye on potential government actions aimed at improving competition in the fuel market.
This is a developing story, and further updates will follow as market conditions change.
