Measurement and Testing
Why Might Hurricane Harvey Affect UK Petrol Prices?
Sep 11 2017 Read 605 Times
While weather doesn’t usually affect petrol prices, Category 4 storms like Hurricane Harvey are more than enough to disrupt the market. Last month the rapidly rotating storm system rolled into the US and threatened infrastructure that refines around 25% of America’s gasoline supply. It triggered a nationwide price spike, and now experts are warning that the UK could be next in line.
A multi-billion-pound damage bill
As Harvey bludgeoned south Texas with historic rainfall, the majority of the state’s oil producing facilities were forced to greatly reduced their output, or cease operations altogether. While some refineries have now resumed full production there’s no escaping the aftermath. Costs are continuing to mount, with authorities estimating that storm damage in Texas and the Gulf of Mexico will top £97 billion. This will inevitably trickle down the supply chain, and eventually hit UK shores.
Unleaded set to trump diesel
In the wake of the flatline the RAC is warning that the price of unleaded petrol in Britain could soon surpass that of diesel. The association maintains that per litre prices could rise by up to 4p, which would mean drivers are lumped with 121p/litre costs. These are levels that haven’t been seen since December 2014.
"This will be the first time unleaded has been higher than diesel since June 2016 and we expect this to be the case for some time to come - or at least until the US oil industry is able to get refineries back into operation," warns RAC spokesman Pete Williams.
Harvey adds to an upward trend
While Harvey is a major culprit, the AA asserts that any price rises need to be taken in context. The group reminds motorists that UK petrol prices were already on an upward climb, triggered by an increase in the price of oil since mid-August.
Despite Stateside disruption the AA remains optimistic, with spokesman Luke Bosdet asserting that while "Katrina destroyed oil infrastructure, Harvey has just disrupted it." This positive attitude implies that while the AA is expecting a temporary spike, a long-term surge isn’t necessarily a risk.
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