Oil prices in the UK surged on Tuesday to their highest level since September 2014 after Russia President Vladimir Putin decided to send forces into Ukraine. Prices have shot to $97 a barrel as investors feared Russia would restrict its supply of the commodity, with analysts forecasting it will pass $100 in the coming weeks.
Gas prices also sky-rocketed after Germany halted the Nord Stream 2 gas pipeline as Western countries cracked down on Russia in response to Putin’s aggression.
Russia supplies 10 per cent of the world’s oil and 40 per cent of Europe’s gas.
The cost of gas jumped by almost 11 per cent on Tuesday and Brent crude oil rose to a seven-year high of almost $100 a barrel.
Although Britain is less reliant on Russia for gas than continental Europe, experts say there will be a knock-on effect on the global wholesale market which will drive up prices.
There are also warnings that tough sanctions imposed on Russia by the UK and other countries could further fuel the cost of living crisis in Britain, pushing up energy bills and inflation.
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Rising geopolitical tensions drove the average price of fuel up to £1.49 per litre over the weekend but motorist group RAC has warned that an all-time high of £1.50 is expected to be reached in the coming days, the Telegraph reported.
Simon Williams, of the RAC, said: “Russia’s decision to invade Ukraine is already causing oil prices to rise and will undoubtedly send fuel prices inexorably higher towards the grim milestone of £1.50 a litre.
“This spells bad news for drivers in the UK struggling to afford to put fuel in their cars. With retailers quick to pass on any wholesale price rises they experience, we could sadly see the average price of unleaded hit £1.50 in the next few days and diesel approaching £1.54.”
This surge means it would cost £82.50 to fill up a 55-litre family car. A full tank of diesel would cost £84.70.
There are fears rising fuel costs will put further strain on household budgets as UK families battle with the cost of living crisis.
Household bills are set to rocket by hundreds of pounds in April as the energy regulator Ofgem has scheduled a 54pc increase in the price cap which will hit around 22 million people.
Inflation also hit a 30-year high of 5.5pc in January with the Bank of England forecasting it will peak at 7.25pc in April, sending costs spiralling.
Addressing MPs in the House of Commons on Tuesday, Prime Minister Prime Minister Boris Johnson acknowledged that energy prices would be pushed to new heights by the situation in Ukraine.
MP for Harlow Robert Halfon said “the war is likely to increase the cost of living for ordinary folk across the country” and called for financial support to help families cope.
Mr Johnson responded: “He is quite right that one of the risks of Putin’s venture is that there could be a spike in gas prices, in oil prices.
“The Government will do everything we can to mitigate it and help the people in this country but it’s one of the reasons why the whole of Western Europe has got to end their dependence on Russian oil and gas.”
Meanwhile, Britain is being warned to prepare for Russian retaliation in response to the UK’s support for the regime in Kiev, including an increase in cyber attacks.
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Speaking in the Commons, Mr Johnson said Putin’s decision to send Russian troops into eastern Ukraine showed he was in “an illogical and irrational frame of mind”.
Mr Johnson told MPs: “One of the things we will have to consider in the weeks ahead, as we continue to lead the world in our support for Ukraine, is the blowback for this country. We must be absolutely frank that there will be cyber attacks. We must understand that and be prepared for it.”
There are concerns older computer systems such as those used by the NHS and local authorities could be particularly vulnerable.
One cyber expert told the MailOnline: “Russia has some of the most advanced cyber capabilities so it is a serious concern. It’s also possible the Kremlin could licence some of the cyber crime groups it shelters to take action directly.
“Even if the UK is not directly targeted by Moscow there could be serious consequences here.
“The trouble is that once this stuff is in the system it can spill out all over the place, especially where you have organisations running old systems.”
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