The price of fuel is set to rise amid speculation over a US-lead attack on Syria.
Fears that the fallout from an attack could affect counties in the wider area caused the price of crude oil to close at US$115.8 per barrel, an US$8 increase compared with the start of August.
By some estimates UK motorists could end up paying 5 per cent more per litre within the next month.
“We forecast the crude oil rise nearly 10 days ago,” chairman of the Petrol Retailers’ Association Brian Madderson explained. “As expected this is a grim outlook for retailers, businesses and motorists across the UK.”
“Independent retailers buying on a daily basis have no alternative but to increase prices at the pump as most have no lucrative alternative business streams with which to subsidise fast rising fuel costs,” he added.
Not everyone believes the fuel price increase will be quite as severe, but seemingly nobody is disputing the rise itself.
“We are coming out of the motoring season and traditionally prices tend to fall,” said Luke Bosdet of the AA. “That is likely to mitigate the rise, although it will probably go up by 2.4 pence a litre in the next three to four weeks. Pump prices have been very volatile over the past 18 months with four significant price swings.”
Although motorists and heavy fuel users such as airlines have been hit by the news, oil companies Shell and BP saw a boost in share price of 4 and 1 per cent, respectively.
Because Saudia Arabia – an area that supplies 35 per cent of the world’s oil supplies – is the only member of the Organisation of the Petroleum Exporting Countries with plenty of spare oil, it’s thought the reduced capacity would cause prices to rise in months to come.
“The Saudis could handle most likely scenarios, but the markets will look at the shrinking spare capacity that remains after any disruption is made up, and that would be bullish [for higher oil prices],” the head of global oil research at French bank Société Générale Michael Wittner said in an investment note.