RAC Report on Motoring 2016

RAC Report on Motoring 2016

1.0 What’s on motorists’ minds?

Following June’s EU referendum, the outlook for both the UK economy and fuel prices has become less clear. A recovery in the oil price in the spring of 2016 means that forecourt costs have started to creep back up again. But with OPEC – the Organisation of the Petroleum Exporting Countries – seemingly committed to exerting downward pressure on oil prices in order to retain market share through a policy of excess supply, wholesale prices – in dollar terms at least – are expected to remain relatively low. For British motorists, however, the weaker value of sterling following the EU referendum could feed through into higher pump prices in the coming months.

That said, the process of renegotiating trade deals with our European partners and of actually leaving the EU is likely to take many months and involves a high degree of uncertainty making it extremely difficult to speculate about future economic conditions. In the 2015 Report on Motoring, the RAC called for greater transparency over how retailers set prices for petrol and diesel.This was due in part to the fact that diesel vehicle owners had failed to see any benefit from the diesel wholesale price falling below that of petrol in the second quarter of 2015: during this period, average diesel pump prices remained stubbornly higher than petrol, in the RAC’s view, for no good reason.

“Fuel has been plummeting for a year so it’s no surprise that pump prices have fallen down the list of priorities for British motorists. But with the Chancellor claiming three-quarters of every pound spent on the forecourts, it won’t take much for that to change. I’d expect to see fuel prices rocket in motorists’ list of concerns next year if the impact of Brexit really bites.” GRAEME PATON Transport Correspondent The Times

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