Oil tops $80 as diesel hits £100

Brent crude moved back around $80 a barrel this week, and UK diesel prices climbed enough to push the cost of filling a typical family-car tank above £100. The move linked wholesale oil markets to household fuel bills within days, as retailers passed through higher costs. In Britain, the RAC said average diesel prices reached about 181.5 pence a litre on August 5. In the United States, the Energy Information Administration said the national average on-highway diesel price was $5.348 a gallon in data released August 4. ### How did a move in crude turn into a £100 diesel fill-up? RAC data published this week showed UK diesel at roughly 181.5 pence a litre, up from 164.52 pence in early July. At that pump price, a 55-litre tank costs just over £99.80, and a slightly larger family-car fill pushes above £100. The RAC said petrol was about 161.5 pence a litre. (oilprices.today) The RAC says it tracks both wholesale and pump prices daily across supermarket, motorway and independent forecourts. That matters because diesel and petrol do not move one-for-one with crude on any single day; taxes, refining margins, distribution costs and retailer pricing also feed into what drivers pay. ### Why are diesel prices moving faster than drivers expect? (finance.yahoo.com) The Bank of England said on July 30 that crude and refined energy prices had remained volatile and higher than pre-conflict levels because of events in the Middle East. The central bank said those higher global energy prices had already led to higher motor-fuel prices for UK consumers. (rac.co.uk) The Bank of England made the same point in its June minutes, saying monetary policy cannot influence energy prices directly and that the effect of the energy shock on the UK economy remained uncertain. In that June statement, the bank said Brent crude had averaged $100 a barrel since the April Monetary Policy Report, compared with $66 a barrel in the period before the February report. (bankofengland.co.uk) ### Is this only a Britain story? U.S. government data released on August 4 showed the national average diesel price at $5.348 a gallon, up from $5.313 a week earlier. The same report put regular gasoline at $4.079 a gallon nationally. Regional diesel prices were higher on the East Coast and in New England, where the EIA reported averages of $5.299 and $5.549 a gallon, respectively. (bankofengland.co.uk) Reuters reported on August 4 that Goldman Sachs expected Brent to trade in an $80-$90 a barrel range until there was either confirmation of a new U.S.-Iran nuclear deal or a significant escalation of the conflict. Goldman said spot Brent’s fair value was about $80 a barrel, according to the Reuters report. (eia.gov) ### Why do central banks care about pump prices? The Bank of England held Bank Rate at 3.75% on July 30 in a 6-3 vote. In its Monetary Policy Report, the bank said CPI inflation was 2.6% in June, above its 2% target, and said inflation was likely to rise over the rest of the year as higher global energy prices fed through into consumer prices. (money.usnews.com) The bank also said the risks to the inflation outlook were tilted to the upside relative to its central projection. That leaves policymakers weighing weaker underlying domestic pressures against imported energy costs that can lift transport and household bills even if growth remains soft. (bankofengland.co.uk) ### What should readers watch next? August 11 is the next release date for the U.S. Energy Information Administration’s weekly gasoline and diesel update. In Britain, the RAC’s Fuel Watch page is updating pump-price averages daily, and the Bank of England’s next policy signals will be read against whether energy costs keep feeding through to consumer inflation. (eia.gov) (bankofengland.co.uk)