Diesel prices subdued by economic worries

Economic uncertainty has helped to subdue red diesel prices recently, but future rises could be around the corner.

Prices had climbed to well over 50p/litre at the start of August on the back of a surge in commodity prices and crude oil values, which increased from $76 to over $82 a barrel.

But concerns that economies at home and abroad could be entering a “double-dip” recession have caused demand and prices for oil and diesel to fall back recently, according to Nick Adamson from Oxfordshire fuel distributor, Ackerman & Niece.

Spot Brent crude values had fallen to around $73 a barrel as Farmers Weekly went to press on Wednesday (25 August), with red diesel typically priced at 48-49p/litre depending on load size.

The recent fall will provide a small consolation for farmers as the peak autumn cultivation period gets underway and many struggle to clear another rain-affected harvest and potentially face high drying costs.

“As long as worries about the state of the economy continue, fuel prices should stay down. But, the potential for prices to jump is there with any upturn in the economy,” Mr Adamson said.

“Until now, harvest has been relatively trouble-free, but if we see high demand for fuel for drying, we could see prices go up,” Duncan Lambert from Rix Petroleum added.

Further upward price pressure would come on 1 October when the previously announced fuel duty rise comes into effect, he said. This would add 1p/litre to white diesel prices and potentially a similar amount to red diesel, he suggested.