- Fuel prices may reach £2 per litre this summer, the RAC has warned.
- A global rise in demand has led to an increase in prices.
Fuel prices in the UK are touching record highs. On Monday, the price of petrol reached 175.6p a litre, 6.6p up from 169.0p seven days ago. On the other hand, diesel price reached 185.3p a litre, up by 3.7p per litre over the week. This is the largest increase in fuel rates since March. It seems the woes of motorists aren't going to end soon as the price may climb up to £2 per litre this summer.
According to RAC, the motoring services provider, rising global oil prices and a weakening of the pound against the US dollar are likely to push the fuel prices further up.
Why are oil prices soaring now?
Oil prices are rising due to increased demand across the world. As per RAC, analysts have predicted that the average price of a barrel of oil will stay around US$ 135 for the rest of this year. Additionally, a weaker pound versus the dollar means that retailers will have to pay more to buy oil.
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With a higher wholesale price, dealer commission, and VAT, fuel prices are expected to surpass the £2 a litre mark, taking the average fill-up to a whopping £110.
Notably, the government had announced a 5p fuel duty cut earlier this year, but it has failed to provide any significant benefits to the consumers. Reports have claimed that several petrol retailers are not passing the cuts to the consumers but instead have raised their profit margins. Last month, British Prime Minister Boris Johnson ordered the Department of Transport to draw up proposals to 'expose' the offending retailers.
Let us now take a look at the stocks of some forecourt operators listed on the FTSE.
BP PLC (LON: BP.)
The British oil supermajor is one of the largest oil and gas companies in the world and among the UK's leading fuel retailers. It currently holds a market cap of £86,309.56 million, and the shares have provided a return of 41.28% to the investors over the past one year. On a year-to-date (YTD) basis, the shares have delivered a return of 36.54%.
Shares of BP traded 0.99% higher at GBX 450.90 as of 8:35 am GMT+1 on 8 June 2022.
Tesco PLC (LON: TSCO)
Tesco is the UK's largest supermarket chain and also a leading petrol retailer. It is listed on the FTSE 100 index.
The company's shares were trading at GBX 258.10 at 8:51 am GMT+1 on 8 June with a market cap of £19,455.28 million. The shares have provided a return of 14.78% to the investors over the last one year. The YTD return stands in the negative territory at -10.87%.
J Sainsbury Plc (LON: SBRY)
J Sainsbury Plc, trading as Sainsbury’s, is a supermarket chain and also a major petrol retailer in the UK. It recently announced that it would stop selling Russian diesel at all of its 300 stations by the end of this year.
With a market cap of £5,188.63 billion, the company's shares were trading at GBX 220.80, down 0.27%, at 8:40 am GMT+1 on 8 June 2022. The share value has depreciated by 15.50% over the past one year, while the YTD return stands at -19.36%.
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