Why are oil prices soaring? How much does it cost and will the price go down?

Hiking is the result of several factors, the effects of which are now being seen internationally.

But how long will it last, and what has made the price soar? Here is everything you need to know.

Why are oil prices rising?

Gasoline prices are rising around the world, and many reasons combine to cause them to rise.

One of the main reasons fuel prices have risen so high is the growing demand for fuel prices as companies cut off their ties with Russia after the February invasion of Ukraine.

When the Covid-19 pandemic began, oil prices plummeted due to the closure of the world, and in April 2020 oil recorded a negative price for the first time in history.

However, when the global economy began to recover, demand soared and prices soared. However, suppliers struggling to scale up are unable to meet demand and are pushing up prices.

Oil prices this week were about $ 120, compared to about $ 80 in January before Vladimir Putin invaded Ukraine.

How much is the fuel cost now?

The average cost of a fuel tank exceeded £ 100 for the first time in a typical 55-liter family car.

According to data company Experian Catalyst, the average price of 1 liter of gasoline at the UK outpost reached a record 182.3p on Wednesday. It was an increase of 1.6p from the previous day.

It followed a 2.2p jump on Monday-the largest daily increase in 17 years.

Meanwhile, the average price of a liter of diesel on Wednesday was a record 188.1p.

Cabinet Minister Michael Gove warned oil suppliers not to exploit customers during the crisis.

Regarding Sky News, the Minister of Level Up said: “One of the things we have to do is to prevent every vestibule, every store, from taking advantage of this situation and making excessive profits.

“I think we need to monitor this. The Competitive Markets Department and others are always on the lookout for eagle to prevent companies from being unfairly using consumers. I know. “

Did Russia’s invasion of Ukraine affect fuel prices?

Despite high oil and fuel prices before Russia’s invasion of Ukraine in February, the war exacerbated the situation and Russia was one of the world’s largest oil exporters after Saudi Arabia.

In his speech on April 1, President Biden said: “Putin’s invasion of Ukraine has pushed up gas and food prices around the world.”

Russia’s imports account for only 8% of Britain’s total oil demand, and the government says it will decline Russia’s oil imports by the end of the year.

Nevertheless, the EU is much more dependent on Russia’s oil imports, 27% from the country, and leaders agreed to ban most Russian imports by the end of the year, The United States has also announced a total ban.

This led to a surge in demand from other oil suppliers, with prices rising overall, including in countries that initially did not obtain oil from Russia.

In addition, at the end of March, Prime Minister Rishi Sunak announced a 12-month fuel tax cut of 5p to give rest to drivers struggling to fill their tanks.

Taking VAT into account, the overall savings were 6p per liter, and Snack said at the time that he had reached “the greatest reduction in all fuel tax rates to date.”

Will fuel prices go down?

Experts hope that fuel prices will soon begin to level off following a surprising drop in wholesale prices this week, but believe the peak is still “a little further away.”

Between December 2021 and January 2022, diesel and lead-free fell from 150.6p to 147.28p and 145.55p, the last time we saw a drop in prices.

RAC spokesman Simon Williams commented on the price increase for the runaway pump, saying: This makes unleaded liters cheaper than 7p in supermarkets. This is well above the UK average of 4p. “

On Wednesday, he added that he believes other supermarkets will raise their prices to fill the gap, “these are unprecedented times in terms of the accelerating cost of vestibular fuels.”

He continued. “Sadly, we still seem to be a bit off the peak. The average price of diesel is heading towards £ 2 per liter, but the cost of wholesale gasoline on Tuesday unexpectedly falls by about 5p per liter. If this price is maintained for the next few days, it could stop the daily record oil price flow. ”