Fuel prices edged up slightly throughout December, closing out the year with modest increases for both petrol and diesel. But with new renewable obligations taking effect in January, will 2025 start with further price hikes?
December Fuel Trends: Modest Increases
Unleaded petrol rose from 135.6 pence per litre (ppl) at the start of December to 136.4ppl by the month’s end. Diesel followed suit, increasing from 141.6ppl to 142.7ppl on average.
Supermarkets continued to offer the lowest prices, with Asda leading the pack for both unleaded and diesel. Morrison’s kept its increases minimal, raising unleaded prices by just 0.5ppl, solidifying its position as the second most affordable supermarket for fuel. By December 31, supermarket averages sat at 134.2ppl for unleaded and 140.4ppl for diesel.
Crude Oil Stability Points to Steady Pump Prices
Crude oil prices remained relatively consistent throughout December, trading between $71 and $74.75 per barrel. Combined with November’s similarly stable range of $71 to $76, this suggests a continued period of stability for pump prices heading into early 2025.
Interestingly, in the final days of December (27th–29th), more petrol stations reduced prices than increased them, with the majority holding steady. While Brent crude closed the month near its high at $74.72, the overall trend suggests that fuel prices may have reached a temporary ceiling.
Impact of Renewable Obligations
Starting 1st January 2025, the proportion of renewable fuel required in both unleaded (E10) and diesel (B7) will increase. Although the fuel itself won’t change, meeting these obligations will slightly raise wholesale prices to fuel retailers.
This change is expected to add between 0.30ppl and 0.40ppl to the wholesale cost of both fuels, which could translate to higher pump prices. While this is a modest increase, it’s something drivers should be aware of as they fill up in the new year.
What to Expect in Early 2025
With crude oil prices stable and fuel costs already near their peak, early January is likely to see steady prices for both grades. However, the added cost of renewable obligations may prevent significant drops. Local competition will play a key role in determining whether these costs are absorbed by retailers or passed on to consumers.
To find the best deals near you, remember to check the PetrolPrices app. With price comparisons and more updates than any other platform, it’s the easiest way to ensure you’re not paying more than necessary.