Pump Prices Tipped To Hit All-Time High

British motorists pulling into petrol stations today are likely to find themselves forking out a record sum to fill their tank.

The AA said it expected petrol prices to hit more than 120p a litre - topping the 119.7p high seen in July 2008. The increase is partly a result of soaring wholesale costs, with the price of oil hitting an 18-month high as analysts predict US economic recovery will spark higher demand. UK drivers have also been hit by the weaker pound pushing up wholesale petrol costs, as well as fuel duty hikes from the Government.

Although Chancellor Alistair Darling staggered the introduction of the latest duty rise in last month's Budget, 1p a litre was added on April 1, with a further 1p rise to come in October.

AA figures from last Wednesday - before the latest duty hike came in - showed average petrol pump prices at 118.07p per litre, with diesel at 118.67p a litre. The data showed a dramatic increase from April 1, 2009, when petrol stood at 92.44p and diesel at 100.44p.

Andrew Howard, of AA public affairs, told Sky News: "You have to wonder if there is something odd going on in the refining process to explain why petrol has rocketed up so far against diesel. "The other quite remarkable thing about the situation is that at motorway service stations last week the cheapest and the dearest were 9p apart - which shows retailers are adopting different strategies and that businesses knew the holiday season was coming."

Mr Howard said price rises have been in the pipeline for some time.

The duty rises were announced last year, while crude oil has steadily risen from February's sub-$70-a-barrel mark. Crude oil for May delivery has been trading at more than $85 a barrel - the dearest since the peak of the financial crisis in October 2008. The current all-time petrol price high of 119.7p was reached when oil prices rose to $147 a barrel - but at a time when the pound was far stronger.

 

Source - Sky News

Posted Date: 06th Apr 2010