Now that the dust is settling after the results of the General Election last week, we can start to see what impact it might have on the prices we will be paying for fuel in the UK in the coming months.
The main direct impact of the election result in relation to U.K. Fuel prices will be on the value of sterling, which has dropped around 2% since the results were declared, but probably less than many, including me, might have thought, bearing in mind how much uncertainty came with the results.
I would suggest that the pound will be volatile in the coming months, so prices of kerosene and gas oil might jump around a bit, but diesel prices will be far less proportionally affected due to the fixed amount of tax it attracts. In general terms, around 80p per litre of what we pay at the pumps is tax, and around 35 – 40 p is the actual cost of the fuel (which is the bit that changes with oil prices and currency).
As ever, things outside of the UK are more likely to have a bigger impact.
For example, the week prior to the election saw a major fall in global oil prices triggered by Shell reopening a Nigerian oil field (adding 240,000 barrels per day of supply) and the US Department of Energy reporting higher than expected stocks of fuel…This saw a 5% oil price fall in two days.
Most of the longer term forecasts suggest that the price will continue to hold around $50, as it has for the majority of the past year.
That said, we live in a time where forecasts are often inaccurate….as Mrs May found on Friday morning…