Fuel Prices Set To Soar This Summer

Monday, 3. May 2010

We have such short memories! I remember the furore when petrol prices hit 119.7pence per litre 2 years ago. Fuel suppliers were challenged and emails flew around in all directions telling everyone to boycott the main oil companies in an attempt to force petrol suppliers to drop their prices. At the time oil prices were $147 per barrel but with exchange rates at about 2 dollars to the pound it put the price per barrel at about £70. Currently the cost of oil is $85 per barrel, which, at 1.53 dollars to the pound puts the current cost at £55 per barrel or 20% lower and yet we currently have petrol prices higher than 119.7pence at around 123 pence per litre. So does this mean that we have a lot more pain to come as oil prices continue to increase? Most experts say yes. We have increases in duty to feed through and of course there is uncertainty about VAT after the next government gets into power. The general feeling is that petrol prices could rise to 150 pence by the summer putting it out of kilter with other expected price rises as we come out of recession. This increase will also affect other products as everything suffers when petrol prices increase. This could have a disastrous affect on western recovery and add to the already expected pain as whoever gets into power fights to reduce the deficit that we have as a result of the recession bail out! Even more difficult times to come methinks! By Graham Hill