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Why is petrol so expensive? And when will fuel costs go down?
21 March 2022, 13:29 | Updated: 23 March 2022, 13:41
Petrol and diesel prices have reached an all-time high, worsened by Russia's invasion of Ukraine, so when will we see fuel costs go down again?
Filling up your cars has never been so expensive as petrol and diesel prices have risen by 20p a litre in the last month alone.
With average prices at a record 165.9p for petrol and 177.3p for diesel, customers are growing concerned over increasing living costs, especially after recent sanctions were imposed on Russia over the invasion of Ukraine.
So why is petrol so expensive at the moment? And when will it go down? We take a look at all the details surrounding the growing fuel costs:
Related article: What is fuel duty and how will a 5p cut impact petrol costs?
Why is petrol and diesel so expensive?
Petrol and diesel prices are at a record high after the wholesale price for crude oil increased.
Price increases began at the beginning of the Covid pandemic as the demand for energy rose, and since then the cost of oil has continued to rise significantly, with the biggest changes coming in recent months.
And now, following Russia's invasion of Ukraine, the UK is seeing some of the highest prices in 14 years.
Currently, the price of crude oil has taken a slight dip meaning increases should halt somewhat, however, there are concerns over supply issues and further price increases because of the sanctions imposed on Russia and those price dips are rarely passed on to consumers.
There are concerns Russia could react to the restrictions put on them and limit its oil supplies to Europe.
Russia is one of the biggest traders of oil in Europe and is also one of the largest energy producers and oil exporters in the world.
The UK is said to only import 6% of its crude oil from Russia, but the overall effect of supplies globally would still see the worldwide wholesale price increase.
When will petrol prices go down?
This can depend on a number of factors including supply and demand in the word energy market and what happens as the Ukraine and Russia war continues.
Rishi Sunak, has confirmed he will reduce fuel tax by 5p on March 23rd for a whole 12 months. This means the average family car will be £3.30 cheaper to fill up.
Quizzed on whether he was considering a 5p cut in fuel duty before the official spring statement, Mr Sunak said: “We’re the party that has frozen fuel duty for over a decade because we recognise the importance of people being able to fill their cars up and it not be prohibitively expensive.
“We understand that and that’s why we’ve acted for years already on this issue."
Prices increases are expected to slow down, but it's not unlikely the price of oil will continue to elevate.