Following Opec production cut and Brexit Fuel prices surged in UK

According to reports the petrol and diesel rate in the UK has surged to its highest since July 2015, after a three-pence-a-litre rise in December alone.

The average rate of unleaded petrol hit 117.23p at the end of December, with diesel reaching 119.63p, the RAC said.

Meanwhile the wholesale price of both fuels has increased significantly, following the production cuts declared by Opec.

Brent crude surged by 10% on 30 November, the day the cartel publicized a cut of 1.2 million barrels a day.

Consequently, the oil price is now twice more than what it was a year ago, rising from a bottom of $27.88 in January 2016 to more than $55 this month.

Furthermore the drop in the price of sterling since the Brexit vote has also helped in increasing UK fuel prices, as oil is priced in dollars.

Over the fortnight, the RAC predicts the price of unleaded to go up to 118p, with diesel going up to 121p a litre.

Subsequently, the price will be mostly determined by the cost of oil and whether Russia in specific will follow the production cuts it agreed with Opec.

Russia vowed to cut 600,000 barrels a day from January, but in the past it has been unwilling to co-operate with such deals.

“So far the price rises we’ve seen are purely down to the announcement at the end of November that Opec and non-Opec countries would be cutting oil production this month,” said Simon Williams, a fuel spokesperson for the RAC.

In near future, the price of fuel will also be determined by political measures, such as strategies announced by President Donald Trump, and the success of Brexit talks, which are due to begin in March. Both these major events could influence the value of sterling against the dollar.

According to experts the price of oil could also go up to $60 a barrel or more by the end of 2017.