Why Sheffield drivers are set to see their petrol costs soar next week

Petrol prices
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British drivers are being warned that the price of unleaded petrol could jump in the coming days.

This is as demand in the US – as a result of Hurricane Harvey – has seen wholesale prices soar.

The RAC is warning that the price of a litre of petrol could rise by up to 4p per litre, which would take the average price of the fuel above 121p per litre – a price not seen since December 2014.

RAC data shows that this would also mean the average price of a litre of unleaded moves above that of diesel, something that has not been seen in the UK since early June 2016.

RAC spokesman Pete Williams said: “The price of unleaded petrol will leapfrog diesel early next week, rising by up to 4p per litre as the impact of Storm Harvey and the shut-down of large refineries in the Gulf Coast drives up US demand for petrol imports.

“The average price of a litre of unleaded on Thursday 31 August was 117.29p and diesel was 118.14p but we could see unleaded rise in the coming days to around 121p a litre, with diesel likely to stay stable around 118.5p.

"This will be the first time unleaded has been higher than diesel since June 2016 and we expect this to be the case for some time to come, or at least until the US oil industry is able to get refineries back into operation and production in the Gulf Coast returns to normal – to meet the United States’ immense appetite for gasoline.

"“One quarter of the refining capacity in the States remains offline leaving a shortfall of over four billion barrels a day, and crude oil production in the Gulf of Mexico is down 13.5%.

In response, oil traders are acting to redirect fuel to the US ahead of the busy Labor Day weekend surge in travel.

“The price of a barrel of crude oil has also increased to $52.79 dollars following the catastrophic floods in Houston.

"Americans are wedded to their petrol engines and while they have been endeavouring to become more self-sufficient through increased fracking they are now having to buy more unleaded from overseas which is reducing the availability of unleaded for the rest of the world.

“We have already seen the wholesale price of unleaded increase by 5p in just the last week and the ongoing crisis in the state of Texas could have a prolonged impact on demand and, in turn, the wholesale price – so we may see further price increases on the UK forecourt.”