Petrol prices RISE at UK pumps: "First and real obvious signs of the impact" of Middle East war
THE first signs of petrol price rises may already be being seen at the pumps in the UK, experts warn.
Petrol and diesel price are starting to rise again in the UK, new figures show today.
It is 132.33p per litre for petrol, up from 131.39p last week. This is the highest price since May 5.
Diesel is up to 139.03p per litre from 137.54p last week. This is the highest price since May 12.
This comes as Middle East unrest threatens the price of oil globally with Iran threatening to close the Strait of Homuz.
US President Donald Trump, after conducting a bombing campaign in Iran at the weekend, said a ceasefire had been declared between Israel and Iran - though that agreement has already reportedly been broken.
Newspage spoke to experts who are mixed on whether this uptick is directly caused by the Middle East unrest.
John Woolfitt, Director at Atlantic Capital Markets, said these are the first signs of the conflict affecting the UK.
He added: “This is indeed the first and real obvious signs of the impact of an ongoing confilct and it is no surprise the price at the pump has jumped, the oil companies are always quick to move on the back of any increase in oil prices. It will be interesting to see if they drop it as quick if it all calms down. I don't expect oil to keep on rising but I do expect to see high volatility in the prices as news develops.”
Ranald Mitchell, Director at Charwin Mortgages, believes it is having a direct effect on petrol prices.
He said: "Petrol and diesel creeping up again is more than just a pinch at the pump, it's a warning light on the dashboard of the wider economy. If these rises continue, the inflationary ripple effect could hit everything from haulage to food prices.
“Energy costs feed into every corner of industry, and motorists are just the first to feel the squeeze. The Middle East tensions may be thousands of miles away, but their impact is starting to be priced in here at home, and if prices keep climbing, this could fuel a fresh wave of cost pressures just as we’re trying to get inflation under control.”
Rob Mansfield, Independent Financial Advisor at Rootes Wealth Management, fears prices will spike in the near future.
He said: “Pump prices are volatile at the best of times but the destruction in the Middle East is not helping. There are almost as many moving parts as there are egos involved and so anything could happen. If there's any disruption to the oil supply, we could well see the price spike.”
Pete Mugleston, Mortgage Advisor & Managing Director at Online Mortgage Advisor, said it was “probably too early to say whether these figures are a result of the conflict in Iran”.
He added: "We'll probably need a few more weeks to draw a definitive conclusion as to whether the conflict is having an impact.
“But if it carries on, it almost certainly will, given that Iran is a key oil supplier. If Iran does go ahead and close the Strait of Hormuz, expect prices to go up, as the strait is a bottleneck and will affect global supply, causing prices to increase.”
David Belle, Founder and Trader at Fink Money, said oil prices had actually gone down today and he expected petrol prices to go back down by the end of the week.
He said: “There should be no uptick given oil prices have had the sixth biggest reversion to the downside since 1975. If we do not see petrol prices lower at the back end of this week, we must be asking questions.”
Harry Mills, Director at Oku Markets, predicted the Pound will be hit by the Middle East conflict.
He added: "Geopolitical risk is now a key driver of FX volatility, and the Iran conflict has the potential to trigger a broader risk-off move in global markets. The pound dipped by more than half a per cent against the US dollar since the market reopened after the weekend and the news of the United States' bombing of Iran.
"Should tensions escalate further, the pound will likely lose ground across the board as investors seek safe havens such as the dollar, Japanese yen, Swiss franc, gold, and government bonds. Sterling is seen as a relatively riskier currency, and certainly not as a safe haven, a status underlined by recent poor economic data and the market's lack of faith in the Chancellor's fiscal plans.
"A weaker pound could feed through into higher inflation via more expensive imports, particularly energy. If the Bank of England feels compelled to keep interest rates higher for longer to anchor inflation expectations, this could delay or even reverse expected mortgage rate cuts."
