PetrolPrices.com has a unique position in the petrol market, bridging the gap between you, our members, and the industry itself. While we never ask for change, we do believe in making sure that you are kept up to date with what’s happening in the industry.
In this article, we’ve covered everything that’s happened this year and looked forward to next year and what you can expect. We spoke to our Data Analyst, Ashley Beach to get his view on the past year, and then our content team researched into what the industry thinks about what will happen next year.
The past year
Ashley Beach, Data Analyst at PetrolPrices.com, said “As 2018 comes to an end it’s time to recap on the year of UK fuel prices. With December 2017 being the most expensive month of 2017, the UK was hoping for a decrease in fuel prices for the year ahead.
Unfortunately, prices continuously increased through January with a 1.1p per litre increase across all fuels by the end of the month, except for premium diesel that saw a rise of 1.6ppl. However, come February and supermarkets started the first price war of the year resulting in a 2ppl average price decrease across all fuels.
The hope for lower fuel prices ended when the constant prices through March started to increase through April. May was a crushing month for drivers when average fuel prices saw a rise of 6ppl, the most significant increase over a month in 18 years. The prices then dipped by the end of June, due to another supermarket price war and rumours that OPEC were going to lift restrictions on production.
Sadly, the price drop was not as extreme as expected and through the next few months prices rose above the previous high induced by the increases in May. Late October to early November saw average prices of diesel at their highest of the year, whereas for unleaded this was mid-October. Prices maxed at 131.7ppl, 137.1ppl, 144.6ppl and 150.5ppl for unleaded, diesel, super unleaded and premium diesel respectively.
Until mid-November, the average price of diesel stayed close to its maximum price of the year, while the average price of unleaded had decreased by 3.2ppl by mid-November, inducing a vast difference of 8ppl between the two. Through December this difference continued to increase to 9.8ppl. We hadn’t seen a difference between the average prices like this since January and February 2015.
The forecast for drivers in early 2019 looks hopeful from the continuous price decrease of all fuels since mid-November. Especially for unleaded drivers, since the rate it’s falling seems to be greater than diesel. Also, the average price of super unleaded has dropped to approximately a penny above regular diesel.”
Onto next year
Oil price is one of the main factors that affect the price of petrol and diesel, so it is only natural to mention some factors that will affect the market this year heading into next year.
Iran is the top concern for the industry, as the American waivers on the countries buying oil from Iran end in May 2019. In November this year, the first round of deadlines approached but America got worried and issued a new set of waivers in hopes to bring down the price of crude oil, after going on about the seriousness of reducing Iran’s oil output to zero. With there now being a supply surplus in America, it is likely that the Trump administration will be able to take a harder stance come May.
Libya is also a regular concern, having been a source of instability in the oil industry for years, they recently lost 400,000 barrels per day (bp/d) output due to militia action in Iran. With high goals to increase production in 2019, Libya could surprise the market either way with a high increase or decrease.
The USA proved to be a dark horse this year, with unprecedented growth from their shale production and surpassed all 2018 estimates, some by up to 1 million bp/d. However, the recent downturn in prices, financial stress and pipeline issues could eventually slow growth. A new pipeline in the second half of 2019 could help to meet targets for non-Opec oil.
OPEC+, the corporation of all the oil-producing countries, has also got a cut set in place to help reduce the current surplus. It is yet unknown whether this will happen by the mid-year meeting in Vienna, which may force OPEC to increase the cut until further on the year.
The possibility of economic downturn could also be an issue, slowing growth in China, contracting GDP in Europe, currency crises in emerging markets and financial volatility across the world. Uncertainty around Brexit, especially in European markets could also contribute as March hits.
With all of this said, the team at PetrolPrices wishes you a Happy New Year! We’ll continue to update you on what happens throughout the year. What do you think will happen in 2019 for petrol prices?