Stronger sterling helps stabilise red diesel prices

Red diesel prices have remained relatively stable over the past month, despite increases in the price of crude oil and stronger demand as the busy silage season gets into full swing.

Spot crude has increased by about $10 a barrel since the start of May to just under $60 a barrel at the time of writing. But red diesel has remained about 40-41p/litre for much of the spring, 25p/litre less than this time last year, says Nick Adamson from Oxfordshire fuel distributors Ackerman & Niece.

Strengthening of sterling against the dollar was the main reason for the limited impact of the higher crude oil prices, he said. Since the start of May, the pound had climbed from about $1.48 to nearly $1.60 this week.

“[Crude oil] Prices seem to be tracking the stock market and are almost up to a level that OPEC will be happy with, so I think things should stay fairly stable for the foreseeable future,” Mr Adamson added.

“But we’re not out of the woods yet. There’s a lot of speculation that oil prices could go higher. Every summer we start worrying about supplies for the coming winter and there’s the added complication of the hurricane season in the States and the possible disruption it can cause to supplies.”

Red diesel prices

Month

Average price (p/litre)

June 2008

66

October 2008

53

January 2009

42

June 2009

40-41

Source: Ackerman & Niece

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