Cost of petrol and diesel surges as supermarket price war ends

It'll now cost an extra 41p to fill up a diesel family car according to data released this morning by the RAC's Fuel Watch.

That's compared to November, when a price war between supermarkets led to a fourth month of decreasing petrol and diesel prices.

The organisation says the average cost of unleaded fuel is now 126.1p per litre - up from 125.8 at the start of December, and representing an increase in 13p for a 55-litre tank of petrol. Diesel now costs 130.6p per litre, up 0.75p compared to early December.

The increase is being pinned on the cooling of a 17-month trade war between the USA and China which was leading to reduced prices of crude oil.

“While there was some positive news for drivers in December with an overdue fuel price cut from the supermarkets mid-month, after Christmas things unfortunately took a turn for the worse when oil began to go up as a result of the US’s trade war with China cooling down. This led to the first monthly increase in the average price of unleaded since July," said the RAC's fuel spokesman, Simon Williams.  

“As we embark on a new decade it is difficult to see that 2020 will be a good year for drivers in terms of fuel prices. As it stands we can’t see any reason for prices to come down significantly. Sadly, it seems more likely that there will be slight increases to contend with, unless of course there is a substantial jump in the value of the pound against the dollar or an unexpected drop in demand for oil.”

Supermarkets were quick to respond to rising oil prices. Asda had led the way on 13 December by cutting 2p off a litre of unleaded, taking its pump price to 117.7p, and reducing diesel by a penny to 122.7p. 

But by 29 December the supermarket had already increased its petrol price by 2.5p to 120.26p a litre. Its rivals also increased their unleaded prices. Despite the mid-month cut the average price of petrol at the big four supermarkets went up 0.24p to 121.4p a litre.