Oil prices have topped $ 80 a barrel for the first time in three years, likely to put more pressure on motorists when the higher cost trickles down to the pumps.
Brent crude rose for the sixth day in a row as supply concerns coincide with more countries, such as Japan, easing COVID-19 restrictions, likely to boost demand.
It came as Bank of England Governor Andrew Bailey said the UK economy was entering “tough terrain” as inflationary pressures mounted and the recovery weakened.
Oil prices are rebounding after Brent crude fell below $ 20 a barrel last year in the early days of the pandemic, and an independent US benchmark, WTI, even briefly. turned negative.
Motorists already face a headache as panic buying sparked by concerns about a shortage of fuel tanker drivers creates long lines on the concourse, and with gasoline prices at an eight-year high. .
The RAC, the automobile organization, has accused “a small number of retailers” of taking advantage of the situation by raising prices.
The government has said that the army is on hold with soldiers in “higher readiness” to help deliver fuel if needed.
But gasoline ministers and retailers hope that after motorists have drained the pumps in recent days, calm will regain.
Panic buying has led industries, from taxi drivers to the meat processing sector, and even football outside the league, to face difficulties and sparked calls for healthcare workers to take priority.
It adds to a cocktail of supply chain problems already created by a shortage of HGV drivers, as well as rising gas prices across Europe that have led to the collapse of a number of smaller energy companies.
Among the pressures on energy supply is the lack of wind to generate renewable energy.
Mr. Bailey joked that when notified of this latest setback, he was tempted to ask “and when will the lobsters arrive?”
The Bank’s governor acknowledged that recent evidence had strengthened the case for a “modest policy tightening,” that is, raising interest rates or lowering the Bank’s £ 895 billion bond purchase program to try to control inflation.