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Friday 14 January 2011

Petrol prices to hit £6 a gallon

Petrol could soon hit £6 a gallon for the first time, according to experts, after the price of oil on the world markets climbed higher following an oil spill in Alaska.

Politicians are not anti-car, they just love taxation
If the average price hits 132p a litre it will be the equivalent of £6 a gallon Photo: MARINA IMPERI

Hauliers said they were already planning for a possible blockade in protest at prices, which have hit a fresh record every day since the start of the year when it was pushed up first by an increase in fuel duty and then the jump in VAT to 20 per cent.

According to petrolprices.com, a website which monitors 11,000 garages in Britain, the average price at the pumps yesterday was 127.8p for a litre of unleaded and 132.05p for diesel. There are nearly 400 forecourts in Britain charging 130p a litre for unleaded petrol and four that are selling petrol for 140p a litre.

If the average price hits 132p a litre it will be the equivalent of £6 a gallon.

The price of petrol has also been pushed upwards by the climbing price of oil, which shot up over the weekend on news that BP and its partners had been forced to shut down the Trans-Alaska Pipeline System, which carries 15 per cent of America's oil, after a leak was discovered.

There is no threat to the environment, the company says, and the leak has been contained. However, the disruption to such a major source of global oil sent the price of Brent Crude futures up $2.13, or 2.3 per cent, to $95.46 a barrel in London.

John Hall, of John Hall Associates, an independent energy consultant, warned that speculators were trying to push prices above $100 a barrel.

“It could top that figure in the short term," he said.

“It is like a bubble, there will come a point in the spring when speculators will pull back. But in the short term the rise in oil prices and taxes is bad news for motorists.”

The AA calculated that for every $2 that is added to the price of oil, 1p is added to the price of petrol, meaning that a $100 oil price would lead to a 130p price at the pumps.

Luke Bosdet at the motoring organisation said: "Speculators are desperate to get up to $100.

"Most people cannot afford these higher petrol prices, but unfortunately a combination of ever increasing tax on fuel and speculators gambling on the price of oil is leading prices inexorably higher." Six months ago the price of oil was not much above $70 a barrel.

Last week the International Energy Agency said that international oil price was now in "danger territory" and threatening the global recovery.

Hauliers have indicated that fuel protests, last seen in 2000 when petrol prices went above £1 a litre, were a distinct possibility.

“The feed back I am getting is that it is not a matter of if protests will happen, but when,” said Andrew Spence, one of the orchestrators of the previous protest, when lorries drove at 40 miles an hour down the M40 motorway, causing traffic chaos.

“With the VAT rise and increasing fuel duty, what is coming around the corner is inevitable and it will be sooner rather than later. People are already making concrete plans.

"I have been inundated with calls from hauliers, taxi drivers and bus drivers who are all asking when we should start up again.

David Handley, who was involved in the protests in South Wales, said feelings were running high among hauliers.

“There is definitely something brewing,” he said. “We are talking about the fuel situation all the time and the need to do something about it.

“Is something imminent, I would say now. But will something happen within the next six weeks, I would say it is possible.”

Maria Eagle, the shadow Transport Secretary, said: "We called on the Government not to increase VAT. If they won't listen to that perhaps they will listen to an appeal not to increase fuel taxes any further, which keep piling on the pressure on families."

Petrol first broke through the £5 a gallon, or £1.10 a litre, barrier in 2008, and once more at the start of last year, and has risen steadily since.

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