A new ban on petrol and diesel vehicles will likely drive down prices across much of Europe, with the UK and US particularly affected.
Prices for petrol and petrol blends rose by about 2 per cent on Friday, with diesel prices up by 2 per cents to £1.39.
A report from Barclays said the new measures were likely to lead to a fall in the price of propane by about 10 per cent, while petrol would fall by 6 per cent.
Gasoline prices are already at their lowest in nearly two decades, falling to $1.12 a litre.
The news was welcomed by petrol and aviation company Jet2, which has raised its forecast for Europe to be a net importer of petroleum products this year.
“We believe that a new price cap will have a positive impact on European fuel prices, which are currently the lowest in the world, and on the ability of European producers to attract the best and brightest talent,” said Jet2 chief executive Richard Beasley.
British Airways has raised the price for its economy class cabin in London from £1,600 (1,500 euros) to £2,200 (2,300 euros).
European airlines also have lower fares this year, with Austrian Air and Norwegian Air raising their fares by 1 per cent and 1 per cen, respectively.
Prices for airfares in Spain and Italy rose, but both were down on Friday.
Spain’s economy ministry said the price hike for its domestic flights was the result of a new regulation, which requires airlines to lower their fuel prices by 10 per ceter for the next year.
“We have now raised the minimum fare in the national airline market to 5.1 euros (2.5 euros) from 5.0 euros (3.5 cents),” said the ministry.
Italy’s economy minister said that the increase in the minimum fares was “part of the overall increase in domestic flights, and a part of the reduction of costs”.
The European Commission said it would not accept a lower fuel price.
EU leaders are expected to meet on Wednesday to discuss the measures, which have already been approved by EU member states.
Britain’s transport secretary said it was “disappointing” that the UK was the only country to go ahead with the measures in a “sensible and reasonable way”.
“This is not the way to go forward,” Norman Baker said.
Mr Baker said the government had “finally accepted” the EU’s position, saying that it was important to get a grip on soaring prices.
‘We have the biggest economy in the European Union’ European Commission President Jean-Claude Juncker said the European Commission was “shocked” by the measures announced on Friday and urged member states to follow suit.
He added: “I would like to stress to all of us that we have the largest economy in Europe.
It’s important that we are not too quick to react to things like this.”
Britain has also announced measures to cut the number of vehicles allowed in the UK.
According to the BBC, British authorities will also start limiting petrol and other vehicles to 10 litres, with a cap of 40 litres for cars.
Fuel costs in the EU have been rising due to the low price of oil and a glut of cheap coal.
UK Prime Minister Boris Johnson said on Thursday that the government was “not prepared to make the same mistake as Germany” in cutting subsidies to fuel producers.
In the UK, the government will impose fuel duty on petrol vehicles up to £30 a litres, as well as on diesel and other fuels.
Germany and France have also introduced fuel duty hikes.
European governments are concerned about the impact on Europe’s economic growth, which will depend on its export markets.
Russia and China are the two countries that are expected, along with India, to benefit from lower oil prices.