Petrol Price Warning As Retailers Forecast Hikes

Fuel prices are set to rise by as much as 5p a litre, according to the Petrol Retailers' Association (PRA).

It comes amid civil unrest in Syria and Egypt as well as a reduction in Libya's oil exports, which are down by a third.

The PRA's forecast follows a rise in Brent crude oil, which pushed past the $110 a barrel mark last week, a 10% increase since the end of June.

Goldman Sachs Group has also predicted that oil prices could go up to $115 a barrel in the 'very near term'.

Brian Madderson chairman of the PRA said: "UK petrol prices have not yet seen the full impact of this crude oil increase due to the rapid and slightly unexpected revaluation of pound sterling from $1.48 to $1.56.

"Therefore it was concerning to read recent comments from the City that the 'pound is overblown' and will soon come hurtling down towards the $1.45 level."

He added: "We calculate at current wholesale prices that this will add a further 5p per litre at the pump before the end of September and hit businesses and households in the pocket at a time when pundits are forecasting a continued increase in retail sales to drive growth in the economy. 

"Should the Middle East tensions escalate further and crude oil prices react accordingly, the Bank of England’s new inflation targets could be significantly challenged.

"The sooner the EU Competition investigation into allegations of oil price fixing is completed, the more certain we can be that our retail fuel prices are only being influenced by macro-economic and political factors and not anti-competitive actions of the oil companies."

The average price of petrol across the UK is currently £1.37 a litre, according to Experian Catalist.

The PRA explained that if its predictions are right and prices rise, it will be fast approaching the record high of £1.42 a litre, which the nation saw in April.

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Petrol Prices Set To Jump By 5p Over Summer

Petrol pump prices could soar 5p a litre - burning a hole in the pockets of holiday motorists, the AA has warned.

A surge in the wholesale cost of petrol across Europe has already led to a rise in UK petrol and diesel prices, with more misery possibly to come, the AA said.

On average, UK petrol prices have risen from 134.61p a litre in mid-June to 135.78p now, while diesel has gone up from 139.16p a month ago to 140.24p now.

The AA said: "A $100-a-ton increase in the cost of petrol across northwest Europe, combined with a weaker pound, heralds a potential 5p increase in pump petrol costs."

It added that should petrol go up 5p a litre then a family from Hounslow in west London, for example, heading off on holiday in a typical family car to Cornwall will pay £2.90 more for the return trip than it would have done in June.

The AA said a survey of last year's visitors to Cornwall found that 26% of visitors came from London and southeast England so that for every 100,000 trips to Cornwall from London and the South East, with 86% of visitors coming by car, the petrol price spike could siphon nearly £250,000 away from the tourism industry into the pockets of the fuel industry.

At present, London and the North West have the cheapest petrol, at 135.5p a litre on average.

Northern Ireland, although enjoying the smallest price rise over the past month, is still the most expensive region for petrol at 136.6p.

Scotland and East Anglia share the position of most expensive areas in the UK for diesel, both averaging 140.8p a litre, while the North West has the cheapest, at 139.7p.

AA president Edmund King said: "After the price of petrol stabilised at around 134.6p a litre through much of this June, and weeks were filled with beautiful weather and sporting excellence, it was perhaps inevitable that oil and fuel market speculators would cast a black cloud over what was promising to be a glorious summer."

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