The cost of fuel has reached a three-and-one-half-year high putting more pressure on consumers already squeezed income.
On the pump, the average price of gasoline has increased to 127.22 p a litre and diesel to 129.96 p a litre, after a rapid increase in the price of oil.
Recent data suggest that the reduction in income has begun to ease, with wages growing faster than prices.
But rising fuel prices threaten to stop the deceleration of inflation more quickly.
“Things have started to look better for the consumer in the uk recently, with inflationary pressures easing and growth of real wages finally started to pick up,” said George Salmon, equity analyst at Hargreaves Lansdown.
However, he said, that the drivers had realized that the impact of rising fuel prices at the pump.
“Fill up the tank is pretty essential expense for most of us, so that the average consumer may find that there are a couple of pounds less in the jar at the end of each month.”
Earlier this month, figures from the government indicate that wages grew at an annual rate of 2.9% in the three months to March, while during the same period, the inflation rate was 2.7%.
As a result, for the first time in a year, real incomes increased, although still lower than before the financial crisis.There is No alternative
“The official figures show that the transport is usually the largest area of household expenditure bar none, and in most cases transport is equal to that of the car,” said Philip Gomm of the RAC Foundation.
He said the poorest households tend to be the most affected due to the drive of the older, less fuel-efficient vehicles.
At the beginning of 2016, the fuel prices dipped by almost £1 a litre mark as the oil went below $30 per barrel. Since then both have risen fairly steadily.
This month the price of crude oil briefly hit $80 a barrel and is still at levels not seen since the year 2014. Last week, the chief executive of the French oil company Total, Patrick Pouyanne, said he believed that oil could reach $100 “in the coming months.”
“If the head of one of the world’s largest oil companies is about $ 100 a barrel or more, then you have to think things are going to get worse before they get better,” said Mr Gomm, pointing out that prices at the pump lag behind the prices in the wholesale market. Temporary interruption?
However, Ruth Gregory, chief uk economist of Capital Economics, said that he hoped that the impact of rising fuel prices in the uk consumer remains limited.
“We are hoping that the price of oil to drift lower by the end of next year. The recent increase mainly reflects the geopolitical tensions and the possible risks of interruption of supply, the factors that we believe should prove temporary.”
In the meantime, the general trend of rising wages will continue, he said.
“We have seen clear signs of a revival in pay growth in recent figures and we are waiting for one more tick up to around 3% towards the end of this year.”
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Alan Clarke, uk economist at Scotiabank, said while filling the tank represents only around 3% of household expenditure on average, the price of fuel goes up, you could still dent consumer confidence.
“The feeling is important,” he said. “Really appreciated [price increases] for the things that you purchase frequently, such as gasoline and food.”
He said that in July, the petrol and diesel prices were likely to be 14-15% more than a year before.
When prices rise to non-discretionary things such as the fuel, there is less left for the “fun” items such as holidays and eating out, the Lord said Clarke.The increase of the offer
The increasing fuel prices comes as a result of higher crude oil prices.
The increase has been driven in part by the President Trump, the announcement that the US would re-impose sanctions on Iran, revoking the agreement to curb Iran’s nuclear ambitions and increasing fears that Iran’s energy exports would be affected.
Fresh us sanctions against Venezuela after the re-election of the socialist leader, Nicolas Maduro, have also pushed the oil price higher.
Despite this, BP chief executive, Bob Dudley, said that he expects from US shale and the increase of the offer of the members of oil group Opec producers to offset the loss of production in other places.
He predicted that the price of oil was going to come back to between $50 and $65 per barrel in the near future.