Fuel price relief may be brief as markets respond to Middle East unrest.

Consumer News
4. Oct 2024
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Fuel price relief may be brief as markets respond to Middle East unrest.

While recent drops in petrol and diesel prices have brought temporary relief, this may not last long. Escalating violence in the Middle East, including tensions between Israel and Hamas, Hezbollah, and Iran, has triggered a rise in global oil prices, with a barrel increasing by around five dollars. The possibility of further conflict could push prices even higher.

As Labour’s budget approaches, there are concerns that Chancellor Rachel Reeves may reverse the previous government's 5p per litre fuel duty cut, with some suggesting even greater increases to support green initiatives. Retailers are usually quick to reflect rising wholesale costs at the pump, meaning drivers could soon see price hikes.

Analysts suggest that while the global economic slowdown is limiting the impact of these geopolitical tensions, there remains uncertainty about how far the conflict might escalate. Some fear that further disruption, particularly involving Iran, could severely affect oil supplies and cause a significant spike in fuel costs. 

In the worst-case scenario, with key shipping routes disrupted, oil prices could soar, further affecting pump prices for consumers. While no major spikes have occurred yet, the ongoing volatility in the region is keeping analysts and markets on edge.

What’s the fuel situation in your area? Share your thoughts in the comments.

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