News that the pound has fallen to a record low against the dollar since decimalisation is bad news for motorists as they face higher petrol costs.
Research by AA calculated that a tank of petrol for a family car has risen by £4.95, based on the $1.14 US dollars to the pound exchange rate recorded on Friday. Since then, the pound has slumped even more against the US dollar, to $1.03 on Monday morning, although it did later rise to $1.06 and later $1.08.
The additional drop recorded since the weekend means motorists will pay even more than the £4.95 extra for a tank that was calculated by the AA based on last week's rates for a 55-litre family car.
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Motorists had been hoping to save on petrol due to the drop in oil prices. But as oil is bought in US dollars, the poor exchange rate undermines those potential savings.
Petrol averaged 164.8p per litre at the start of the week, down from 173.5p in mid-August. But the 8.7p fall is less dramatic than the 15p reduction between mid-July and mid-August.
The average price of diesel decreased by 12.5p between mid-July and mid-August It dropped another 3p to 181.3p at the start of last week.
AA fuel price spokesman Luke Bosdet said: “The influence of the exchange rate is often overlooked when drivers compare oil price movements with those at the pump.
“At the moment, it is critical. Oil and fuel on commodity markets are traded in dollars, which makes the weaker pound very bad news for motorists.
“The price of oil is back to the level at the start of the Ukraine war but petrol is 15p a litre more expensive.
“Two-thirds of that higher cost is down to the weakness of the pound.”
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