Petrol prices to reach record high
Petrol prices could reach a record high of £1.20 a litre in the next few weeks – and that's before the Government adds 3p in fuel duty and VAT onto the cost.
The AA says the combination of a 17% rise in the wholesale price of petrol and the relative weakness of the pound will push the price at the pumps beyond the July 2008 record, despite the fact that the current oil price is well below the $147-a-barrel high experienced that summer.
The nation's largest motoring organisation is calling for an investigation into the sudden surge, which it blames on a lack of refining capacity, and implored the Chancellor to freeze the fuel duty increase scheduled for April 1st.
In a statement, Edmund King, president of the AA, said: "Before this wholesale price surge works it way through to consumer spending and hits economic revival, the AA believes the Government should look at what is behind it. With refiners in Europe closing sites or looking to sell them, soaring wholesale prices could drive down demand and weaken the sector further.
"Political parties have started to jump on the bandwagon of high fuel prices, calling for a fuel price/tax stabiliser. In the AA's opinion, the easiest and quickest stabiliser would be to freeze the fuel duty increase on 1 April."
On Sunday, the average price of UK petrol rose to 115.93p a litre. Even compared with the cost of petrol just a couple of months ago a family with two cars could see their monthly fuel bill rise by almost £17.
Lindsay Hoyle, Labour MP on the Commons business committee, told the Daily Telegraph: "Crude oil has gone up this year, but nothing like the rise in petrol prices. Motorists are being legally mugged at the forecourt by petrol companies."