Red diesel fuel price rise will add to costs
UK red diesel prices were up 6.2% in August to average 82.61p/litre and traders say demand has been strong throughout the month and is likely to remain so into September.
September saw crude oil rise above US$90 (£71.53)/barrel for the first time this year, according to Farmers Weekly.
Duncan Lambert, managing director at Rix Petroleum, said demand is outstripping supply and forcing the price up: “Last year’s harvest was very quick and dry, with limited volumes of fuel being used, while this year has been a more normal harvest and more fuel has also been used for drying crops.”
Neil Cooper, marketplace manager at Yagro, said the biggest factor driving oil markets is that Saudi Arabia has cut its oil production and it is likely to remain at a reduced volume until at least October. This is due to falling prices caused by higher interest rates in the UK and the US, driving fears of a potential recession, which would then lead to a decrease in global fuel demand.
“It looks like prices are going to hold where they are, at least, if not rise,” Cooper added.
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