Expert Blog

The story of fuel prices in 2017

20171222_The story of fuel prices in 2017 [1]

One of the main factors determining the cost of motoring is, of course, fuel prices. The amount we pay for petrol and diesel is always fluctuating, and it can be difficult to keep track of all the ebbs and flows. As we approach the end of the year, we thought it would be a good time to check in and see how prices have changed over the course of 2017.

Up, down, and up again

So, here are the average pump prices for petrol and diesel, as collected every Monday by the Department for Business, Energy & Industrial Strategy:

As you can see, the year started with rising prices: petrol hit 120 pence per litre at the end of January, while a litre of diesel rose to 123p. Prices then fell over the next few months, with petrol hitting a low of 113.6p per litre, and diesel a low of 115.3p, in July.

Since then, unfortunately, the trend has been upwards again. The latest figures – for Monday 18 December – have petrol at 120.0p per litre and diesel at 123.8p. That’s as high as they’ve been all year.

OPEC and Harvey push up oil prices

That rise over the second half of the year has been caused by rising oil prices. Having been as low as $44 in June, the price of a barrel of Brent Crude hit $60 at the end of October, for the first time since July 2015. It now stands at $64.

That’s partly because the Organization of the Petroleum Exporting Countries (OPEC) has cut production to limit supply, and recently agreed to continue that cut until the end of 2018. It’s also because of Hurricane Harvey, which hit Texas in August and caused oil production in the United States to fall.

Putting today’s fuel prices into context

Now, let’s zoom out and put those 2017 numbers into context. Here’s how petrol and diesel prices have changed over the past ten years:

Seen from this perspective, this year’s fluctuations seem relatively gentle. Certainly, they’re a lot smaller than the ups and downs we experienced over the previous three years. And, even now, they’re well below what we were paying from early 2011 to mid-2014. In fact, prices throughout 2017 have been roughly average for the last decade.

What will 2018 bring?

All of which leaves us with the question: where will fuel prices go from here? The price of oil is notoriously hard to predict, dependent as it is not only on OPEC decisions and tropical cyclones, but also on political and economic conditions in producer countries. If it does continue to rise, though, we could find ourselves paying even more for fuel in 2018. Let’s hope that’s not the case.

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