Fuel Price Shock Sends UK Inflation Soaring

UK fuel prices have seen significant increases in recent weeks, adding £2.40 to a diesel fill-up and £2.06 to a petrol fill-up in just one week. According to government averages, petrol reached 168.14p per litre, while diesel hit 190.72p per litre in the week beginning September 14th.

The average cost of a 55-litre petrol fill-up is now £92.48, while diesel costs £104.90. Over two weeks, prices have risen even further, with petrol up 6.53p and diesel up 7.23p since August 31st, adding an additional £3.59 to petrol fill-ups and £3.98 to diesel.

The UK's inflation debate has been reignited by these price hikes, which come ahead of the Office for National Statistics' publication of August consumer-price data on September 16th. The Bank of England will also make its decision on interest rates on September 17th, and will likely take these fuel prices into account.

For listed fuel retailers and supermarket groups, a higher pump price does not necessarily translate to increased profits. Shell's UK consumer guidance notes that forecourt prices generally track wholesale fuel, crude oil, transport, and station operating costs, meaning that retailers can collect more cash per litre while their gross profit per litre stays flat or even narrows.