Motorists warned of likely fuel price rises

The wholesale price of petrol and diesel has started to rise again
The wholesale price of petrol and diesel has started to rise again

Motorists have been warned that the cheap fuel market may have bottomed out as the price of oil shows early signs of recovery.

The average price of diesel fell by 5p per litre (ppl) to 101ppl in January, according to RAC Fuel Watch data.

Petrol prices dropped for the seventh consecutive month, down just over half a pence to 102ppl.

This was driven by oil reaching a 12-year low of $26 on January 20.

But since then the price has rebounded – finishing the month at $33 – which has caused the wholesale cost of petrol and diesel to rise again.

RAC fuel spokesman Simon Williams said: “Motorists have seen petrol and diesel prices reach their lowest points since 2009.

“January saw the oil price go into free-fall with talk of a barrel dropping to $20 and possibly even to $10, but since the low of $26 a barrel the market has started to creep back up.

“If this continues for a sustained period, wholesale costs will rise further which will in turn lead to pump price increases.”

Mr Williams added that the oil market is “notoriously volatile” and said it was still possible it could tumble again.