Fuel prices may have just risen – but there’s worse to come. From April 1, the cost of petrol and diesel is predicted to rise by 8p per litre.
The Daily Mail reports that this will take prices to new highs of £6.18 per gallon for petrol and £6.36 per gallon for diesel. That’ll push the cost of filling up a car with a 50-litre (11-gallon) tank to about £70.
A year ago petrol typically cost £1.10 a litre and an equivalent fill-up would have cost £56. So the price will have jumped by 25%. It’ll also set a new record, passing by the £1.33 charged for petrol in July 2008.
One reason for the increase is the rising cost of crude oil on world markets. Yesterday, the wholesale cost of a barrel rose to $98 on London markets, the highest price for 27 months. Growing global demand could soon see the price top $100 a barrel. Petrol retailers have written to the Chancellor, George Osborne urging him to abandon the next scheduled increase in fuel duty, which would add 5p to the cost of a litre. This and expected oil price increases could bring the total increase to 8p.
Generally, every $2 rise in wholesale oil prices adds 1p to the cost of a litre. Typically, any price-change should take about six weeks to work its way through to petrol forecourts. The govt had proposed the idea of introducing a fuel stabiliser – so that if oil prices rose, the level of duty payable would drop to keep prices stable. Taxes, including fuel duty and VAT, account for roughly three-quarters of the current price of fuel.