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Petrol prices hit new high amid Ukraine tensions Petrol prices hit new high amid Ukraine tensions
(32 minutes later)
Average UK petrol and diesel prices have hit new highs as the Ukraine crisis continues to affect oil prices, the RAC has said.Average UK petrol and diesel prices have hit new highs as the Ukraine crisis continues to affect oil prices, the RAC has said.
On Wednesday, petrol prices rose slightly to 149.30p per litre amid warnings it could soon pass £1.50. On Wednesday, petrol prices rose to 149.30p per litre amid warnings it could soon pass £1.50.
Oil prices jumped after Russia ordered troops into two Ukrainian regions this week, sparking invasion fears.Oil prices jumped after Russia ordered troops into two Ukrainian regions this week, sparking invasion fears.
Wholesale gas prices also continue to climb, threatening to further push up heating bills.Wholesale gas prices also continue to climb, threatening to further push up heating bills.
Russia is the second-largest oil exporter after Saudi Arabia and the world's top producer of natural gas. Russia is the world's second-largest oil exporter after Saudi Arabia and the top producer of natural gas globally.
While the UK gets little of its oil and gas from Russia directly, there are concerns sanctions could constrict supplies, driving up wholesale prices globally. While the UK gets little of its oil and gas from Russia directly, there are concerns sanctions could constrict supplies and drive up wholesale prices worldwide.
That would come as UK consumers are already paying a high price for energy and fuel, with demand surging following the easing of Covid restrictions. UK consumers are already paying a high price for energy and fuel, with demand surging following the easing of Covid restrictions.
Oil prices surge as Ukraine-Russia tensions climbOil prices surge as Ukraine-Russia tensions climb
Putin tells Russians security is non-negotiablePutin tells Russians security is non-negotiable
Former National Grid boss Steve Holliday told the BBC's Today programme: "For the UK, it's a price issue, it's not a security supply issue.Former National Grid boss Steve Holliday told the BBC's Today programme: "For the UK, it's a price issue, it's not a security supply issue.
"We already know that we've got consumers that are already experiencing huge jumps in their energy bills, so this is really very unwelcome.""We already know that we've got consumers that are already experiencing huge jumps in their energy bills, so this is really very unwelcome."
The price of Brent crude oil, an international benchmark, hit a seven-year high of more than $99 (£73) on Tuesday before falling back on Wednesday.The price of Brent crude oil, an international benchmark, hit a seven-year high of more than $99 (£73) on Tuesday before falling back on Wednesday.
However, fuel pump prices lag behind oil prices and the RAC has warned petrol could go higher than £1.50 a litre in the coming days. Diesel has also been rising, hitting 152.68p a litre on Wednesday. However, fuel pump prices lag behind oil prices and the RAC has warned petrol could go higher than £1.50 a litre in the coming days.
UK wholesale gas prices also jumped following Germany's decision on Tuesday to halt Nord Stream 2 - a new gas pipeline connecting the country with Russia. Diesel has also been rising, hitting 152.68p a litre on Wednesday.
While the UK gets much of its crude oil from Norway and the US, the third largest amount of imports come from Russia.
Gordon Balmer, executive director of the Petrol Retailers Association, a trade body for independent UK forecourts, said whether prices continue to rise depends on a number of factors.
"If [conflict] really sparks off in Ukraine, we could prices escalating dramatically," he said.
However, he added that the US is in the process of negotiating a nuclear deal with Iran which could see more oil come onto the market.
Gas prices
UK wholesale gas prices also jumped following Germany's decision on Tuesday to halt the final approval of Nord Stream 2 - a new gas pipeline connecting the country with Russia.
That decision drew a swift response from Dmitry Medvedev, Russia's former president and now deputy chairman of its Security Council.That decision drew a swift response from Dmitry Medvedev, Russia's former president and now deputy chairman of its Security Council.
German Chancellor Olaf Scholz has issued an order to halt the process of certifying the Nord Stream 2 gas pipeline. Well. Welcome to the brave new world where Europeans are very soon going to pay €2.000 for 1.000 cubic meters of natural gas!German Chancellor Olaf Scholz has issued an order to halt the process of certifying the Nord Stream 2 gas pipeline. Well. Welcome to the brave new world where Europeans are very soon going to pay €2.000 for 1.000 cubic meters of natural gas!
"Well, welcome to the brave new world where Europeans are very soon going to pay €2,000 for 1,000 cubic meters of natural gas!" he tweeted - suggesting prices were set to double."Well, welcome to the brave new world where Europeans are very soon going to pay €2,000 for 1,000 cubic meters of natural gas!" he tweeted - suggesting prices were set to double.
UK prices for delivery in March rose by 13.5p to 200p per therm, though that is still much lower than the highs of December last year, when it peaked at over 400p per therm. UK gas prices for delivery in March rose by 13.5p to 200p per therm, though that is still much lower than the highs of December last year, when it peaked at over 400p per therm.
Western nations and Japan on Tuesday punished Russia with new sanctions for ordering troops into separatist regions of eastern Ukraine.Western nations and Japan on Tuesday punished Russia with new sanctions for ordering troops into separatist regions of eastern Ukraine.
The UK said it was ready to impose further sanctions in the event of a full invasion of Ukraine, targeting more Russian banks and individuals as well as companies in the energy, defence, technology and chemical sectors.The UK said it was ready to impose further sanctions in the event of a full invasion of Ukraine, targeting more Russian banks and individuals as well as companies in the energy, defence, technology and chemical sectors.
'Enormous' price rises Trading on stock markets in the UK and Europe was more settled following volatility on Tuesday. The FTSE 100 index of blue chip companies is up 0.53%, while in France the CAC-40 is ahead 1.2% and Germany's Dax is up 0.86%.
'Enormous' rises
High energy prices in the UK have played a major part in pushing up the cost of living recently, while wages have lagged behind price rises.High energy prices in the UK have played a major part in pushing up the cost of living recently, while wages have lagged behind price rises.
Inflation currently stands at 5.5% - it's highest level in 30 years.Inflation currently stands at 5.5% - it's highest level in 30 years.
Speaking to the Treasury Select Committee of MPs on Wednesday, Imperial College London economics professor Jonathan Haskel said energy prices accounted for nearly half of the rise in inflation over the last year. Speaking to the Treasury Select Committee of MPs on Wednesday, Jonathan Haskel, a member of the Bank of England's Monetary Policy Committee, said energy prices accounted for nearly half of the rise in inflation over the last year.
That is likely to rise to 70% in the first three months of 2022, the Bank of England believes. That is likely to rise to 70% in the first three months of 2022, according to Bank of England governor Andrew Bailey.
Addressing the same committee, the Bank's deputy governor Ben Broadbent said: "If you look at the increase in energy bills this year, it is just about twice as big as any single year in the 1970s - it is enormous." The Bank deputy governor, Ben Broadbent, said: "If you look at the increase in energy bills this year, it is just about twice as big as any single year in the 1970s - it is enormous."
The Bank expects inflation to hit 7% in spring when the price cap on household energy bills is raised. This is far above the Bank of England's 2% target.
From April, about 18 million homes on standard tariffs will see an average increase of £693. Meanwhile, 4.5 million prepayment customers can expect their energy costs to rise by an average £708.
Consumers are also being squeezed by rising prices on goods as many companies pass on higher costs such as fuel, shipping and wages to their customers.
As well as the rise in energy prices in April, staff, companies and the self-employed will also have to pay an extra 1.25p on the pound in National Insurance. The rise is being introduced by the government to fund health and social care.