The latest price increase coincides with the United Kingdom preparing for heightened gas demand due to the impending cold weather this weekend and the closure of a gas field off the coast of Israel caused by the Israel-Hamas conflict.
Wholesale petrol prices in the United Kingdom have risen once more and are now at their highest level since mid-February.
Petrol Prices Surge in the UK
On Friday afternoon, prices surged to nearly 135 pence per therm (a unit of heat used to measure gas).
This follows Tuesday afternoon’s peak petrol price of nearly 123p per therm, the highest level since early April and the highest in nearly six months.
“Don’t miss out! Grab your free shares of Webull UK today!”
The rising petrol prices can lead to increased household electricity expenses, as electricity costs are linked to wholesale petrol prices.
Gas Supply Concerns Amidst Conflict
The United Kingdom is gearing up for a surge in gas demand due to the anticipated drop in temperatures over the weekend and the suspension of a gas field off the coast of Israel due to the Israel-Hamas conflict.
The Tamar natural gas field has been idle since Monday as a result of the closure ordered by the Israeli Ministry of Energy.
In addition to supplying Egypt and Jordan, the field provides gas to Israel, used to power electricity generators.
A supply disruption has also occurred due to the discovery of a breach in the Balticconnector pipeline, which transports gas from Finland to Estonia.
According to Petteri Orpo, the Prime Minister of Finland, the damage may have been intentional.
Supply concerns have been compounded by the threat of strike action by Australian gas workers.
Gas is utilized to generate electricity. As of Friday afternoon, gas accounted for 10% of the electricity generated in the United Kingdom.
Factors Contributing to Price Increases
The highest-ever recorded wholesale petrol price in the United Kingdom was 640 pence per therm on August 26, 2022.
Energy costs, particularly petrol prices, skyrocketed following Russia’s invasion of Ukraine.
The rapid abandonment of Russian gas by Western nations has increased the demand for alternative supplies and pushed up prices.
The last peak was 137.25 pence per therm for UK wholesale gas on February 15, 2023.
