UK petrol prices could hit £2.50 a litre and diesel £3, experts tell MPs

theguardian.com:

Petrol could soar to £2.50 a litre, while diesel could hit £3 and might even be rationed, experts told MPs on Monday, as they warned of worsening pain for consumers as Russia’s invasion of Ukraine hits global energy markets.

Prices at the pump have already soared in recent weeks, reaching a succession of highs amid the Ukraine crisis. The latest figures from the data firm Experian Catalist show the average cost of a litre of petrol was 163.5p on Sunday, while diesel was 173.4p.

However, in testimony to the Treasury select committee, experts said prices could increase much further, with diesel – heavily reliant on Russian supplies – potentially doubling.

“Consumers need to get ready for continued rises in fuel prices,” said Nathan Piper, the head of oil and gas research at Investec bank.

Asked about how high the cost of fuel could go, he said: “Not to be flippant but pick a number.”

Amrita Sen, a founding partner and the chief oil analyst at the research consultancy Energy Aspects, said the group was working on the assumption that oil could “easily” rise by 50%.

She said: “If you do it on the basis of crude oil, we’re saying it could easily go up by 50%. Assuming no tax changes implemented by the government, [petrol] could end up being £2.40 per litre.”

She said that because of diesel’s role in industry, it “could go to £2.50, even closer to £3. That’s definitely within the realms of possibility.”

Sen added that diesel was likely to be rationed in Germany before the end of March and that the same could happen in the UK.