Fuel costs to surge after cut in global production

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FUEL costs are set to surge after global oil prices hit a ten-month high.

And a proposed 7p per litre duty rise put forward in the recently released Government Plan could further increase the price at the pumps this winter – just as inflation is starting to fall.

According to the pricecomparison.je website, petrol prices dropped sharply in the year to July, from 171p per litre to 145p, while diesel dropped from 181p last November to 148p in July.

However, both have now risen by about 6p per litre and are likely to increase further during the rest of the year, with the RAC warning that drivers are ‘in for a hard time’.

Heating oil costs have also started to rise after dropping sharply until July this year.

The looming rise in fuel costs has been caused by Russia and Saudi Arabia – members of the global oil-exporting organisation Opec – announcing that they will continue their cuts in production of around 1.3 million barrels per day, which will cause a significant reduction in supply.

Jersey Consumer Council head Carl Walker said the ‘unknown factor’ for 2023 was whether the war in Ukraine would influence prices again this winter.

‘As we enter winter there is more demand on raw fuel supplies, which is starting to bite,’ he said.

‘We live in a volatile world and we need to be wary of that. Consumers can still save money by checking different forecourt prices and shopping around, instead of waiting until the tank is empty,’ he added.

Prices at the pump have started to climb again (credit: pricecomparison.je website) (36634276)

Nick Crolla, the head of sales and marketing at Rubis Channel Islands, said: ‘Over the last few weeks we’ve seen an increase in global market prices, which is starting to filter through locally.

‘While heating oil remains one of the most cost-effective ways to heat your home, if our customers are concerned about potential increases in price this winter, we have options available which can help.’

If the recently published Government Plan is approved in December, fuel duty could also rise – by 7p per litre.

Mr Walker said: ‘It’s quite a jump – it won’t just impact drivers, it affects everything from deliveries to running a business.

‘There’s a real risk it could have a negative impact on inflation rates, at a time when we are just starting to see light at the end of the tunnel,’ he added.

Patrick Lynch, head of Caritas Jersey – a Catholic-based thinktank and campaign group which administers the Living Wage in the Island – said a higher duty would disproportionately affect people on lower wages.

‘A cleaner, for example, they would be really hit by this because they may have to get from St Brelade in the morning to St Martin in the afternoon for their work,’ he said.

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