Petrol could hit £1.15 a litre
Monday 8th June 2009, 11:30AM BST.
Petrol prices are set to soar to about £1.15 a litre by the end of summer, experts warned today, bringing misery to many Shropshire businesses and households.
Experts have claimed that a major increase was on the cards and diesel could reach £1.26 a litre before autumn.
The price of fuel has been shooting up in recent months, following a brief period of respite for drivers during winter.
The national average price for a litre of fuel is now more than £1 but that is set to soar with experts believing an increase could be caused by city bankers speculating on the price of oil.
US investment bank Goldman Sachs has raised its oil price forecast for the end of 2009, anticipating falling supply and rising demand. But that actually caused the price of oil to rise by two dollars a barrel, to 67 dollars.
Today Mark Bradshaw, director of Garage Watch, the independent association of petrol retailers, said he was opposed to further increases.
Mr Bradshaw, who was forced to sell his own petrol station in Quatt, said: “I can’t see any reason why the prices would rise to that extent. There’s been a steady increase for some time, but there’s no real shortage.
“A year ago there were reasons for the prices increasing. There were factors like shortages of supply, high demand and unrest around the world.”
The Government now rakes in more than £1.4 million a day extra from its latest fuel tax rise.
The average nationwide price for a litre of unleaded fuel was today 100.7p while the average for diesel was 103.9p.
How much are you paying? Tell us in the comment box below.
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Why????????????????????????
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Why? When oil was $150 a barrel, petrol was £1.20 a litre, now when oil is $68 a barrel, can the petrol companies justify £1.15 a litre.
Do the oil companies and the govenment think the man in the street will continue to sit back and take it, or will they only listen when people dont buy cars and petrol. Its not rocket science.
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This is so wrong when Oil has reduced to $68 a barrel.
Come on you NEWLY VOTED IN MEP’s and all those in UK Government Seats. Please put a stop to this NOW!
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Not only do you pay higher rated tax on your vehicles,properties,work but you have to pay it on fuel, the economy is struggling enough that includes us tax paying workers, that has to pay the price for wanting a vehicle.
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This will destroy the UK plunging it into an economic crisis of which there will be no hope of returning. Businesses will close down creating mass umemployment, the social security bill will rise with no money in the government coffers to pay for it which will in turn cause them to try to raise taxes to pay for it on the ever decreasing tax paying populace. It’s all a vicious circle. These big oil and gas comnpanies can afford to make a loss for the short term to assist the country out of this recession because they have lovely big pots of retained profits from previous years to offset it – the government needs to impose price freezes on all oil and utility supply companies. At the moment they run the country, not Gordon Brown or Alastair Darling.
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petrol price increse is no good.im using bp petrol station and they charge me 3p to 5p extra on market price.goverment shoud control petrol price and they shoud reduce fuel duty.i know some of country they selling petrol half price then uk.goverment shoud,t rep of pepole.
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this is because of Laboour taxes from clown brown, get him out and get cameron in and we can cut taxes now by cutting the dole
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this is a good thing for the environment it will encourage more cycling so im glad
if the damage of polluting climate change gases was genuinely priced into petrol it would be more like ten pounds a litre
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and in Canada we are all whining that gas prices have risen to $0.935 – about 52p per litre! I shall be telling everybody to count their blessings.
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There’s a very simple reason for fuel prices starting to rise – Gordon Brown’s “quantative easing” and its effect on the value of Sterling.
It is true that oil is much cheaper per barrel in Dollar terms than this time last year, but the state of the British economy, coupled to Brown’s decision to print money, has led to the value of the Pound dropping like a stone, because overseas markets can see Pounds being devalued as the printing presses pick up speed, so they’re not really in demand. As oil is priced in Dollars, then even though it’s cheaper in Dollars, that price is offset by the fact that Dollars become more expensive for us to buy with Pounds.
The same thing will happen with food, gas, electricity and the rest – in short, anything that we need to import.
Inflation is gathering pace, but because the Government measurement of inflation goes from a base which includes items such as mortgages and LAST YEAR’s fuel prices, it seems low. But any person paying for food or domestic bills knows in their hearts that there is no way that inflation is low – we’re paying much more for the everyday things that we NEED to buy and we’ll be paying even more in the next few months.
Repeat of the 70′s stagflation coming up – galloping inflation and a stagnant economy. The only ones who won’t feel the pinch are politicians, civil servants and people on benefits. All the rest of us – batten down the hatches.
Two ways for the government to REALLY help, (rather than simply sitting there with fingers in ears):
1)STOP PRINTING MONEY to pay for *inefficient* public spending.
2) Give the regulators more power over the gas and electricity suppliers who, quite frankly, are taking the mickey. Although they do import energy and pay in Dollars or Euros, they have not really applied any decrease that would have been expected to result from the wholesale dropping of prices.
But there again, apart from inaction and dithering, what else can we expect from a government which sits on its hands whilst proclaiming to be desperate to support “hard working families”? They are so insulated from the real world that they have no idea of the current hardship that most of us face.
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$68 is only about £40… How does that work out to £1.15 a litre at the pump? Genuine question – if anyone does know how petrol prices are worked out (leaving politics out as much as possible) I’m sure we’d all be interested to know.
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This government of useless, self serving pigs have so much to answer for.
Go Brown you deluded oddity
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Ref 11, townie: Fair enough, without the politics:-
Oil out the ground – $68.
Then add ….
Extraction licence fees,
Export tax,
Currency exchange variation costs,
Research and exploration,
Transportation,
Processing,
Distribution,
LARGE AMOUNT OF DUTY AND VAT,
Profit margin to oil company,
Shareholders’ dividends,
Profit for service station.
Starting to get close, but still near 50% more than what it would be in most countries where it’s seen as an essential commodity rather than a “luxury” to be taxed to the hilt.
As non-political as I can make it.
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Reality;
You said
“It is true that oil is much cheaper per barrel in Dollar terms than this time last year, but the state of the British economy, coupled to Brown’s decision to print money, has led to the value of the Pound dropping like a stone”
As a matter of fact, In May last year:
The dollar rate was at 1st May 2008: 0.50720
(1.971 dollars to the pound)
And now is at 10th June 2009: 0.61920
(1.615 dollars to the pound.)
Thats about 18% drop from 1.97 to 1.61 – Hardly dropping like a stone!!
and:
Average (406 days): 0.61007
High: 0.74050
Low: 0.49580
Conversly, in the same time period, the price of a barrel of crude oil was:
May08 $117, and now is: $71.
That’s a change of around 39-40%.
More than twice the change in currency !
So, albeit this is a very simple “snapshot”, it would seem as though:
The argument supporting the value of the pound versus the dollar being responsible is flawed.
Also – we have to ask:
WHEN a barrel of crude oil is refined, what proportion of petrol /diesel oil for “general” use is obtained, relative to that amount refined for military, shipping, aviation, and all the other by products that are derived from oil?
You could almost argue that certainly petrol is almost an “unwanted” by-product, in that it’s only main use is fuelling private cars!!
Surely the main reason for obtaining/refining oil is for more central econmic reasons, or put another way, in times of conflict, private use would soon be rationed, and so the cost per barrel versus the street “pump” price I would suggest in nothing to do with crude oil prices, and everthing to do with factors way beyond our control.
And certainly – IF the main “critical” use of oil for military and transport use is mainly aviation fuel and diesel …. then ….
What is the proportion of Petrol obtained, versus heavier oils such as diesel etc from a given volume of crude oil??
(yes we know about “cracking” ..)
In a period of crisis, when demand of “heavy” fuels rises – as I say, Petrol almost becomes a by-product, that’s just sold for the highest price (AND taxed) possible !!
Pump prices a’int so simple eh??
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Reference:
“experts believing an increase could be caused by city bankers speculating on the price of oil”.
WHAT the HELL are BANKERS, of ALL people, doing speculating on the price of oil??
Good grief – we’ve only just bailed them all out, now they’re using OUR money to play with oil prices!!
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I think £1.15 per litre is excellent value compared to cider.
Petrol is £5 a gallon , whereas as cider is £18 a gallon in the pub. One is just apple juice left to ferment while the other is extracted from inhospitable areas of the world (like Texas), tankered around the world, refined and distributed around the country by a network of pipelines and tankers, to be distributed by sophisticated retail outlets. Can you guess which is which by the price?
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14 + 15, askeric: a good argument, no doubt about that.
A small flaw is when you say that a currency drop of 18% is not falling like a stone and also forget that oil is bought through futures and in competition with other buyers, so when today’s stocks were purchased several months ago, the conversion rate was closer to $1.38 / £1.00, so a 30% drop, much more in line with the price figures that you quote and certainly a fall like a stone in anyone’s eyes. (NB: and the recent rise will reverse as quantative easing makes the £ – and government bond issues – worth less in the eyes of potential buyers, who will look elsewhere to invest, away from Sterling denominated opportunities.
You’re probably right about bankers who should not be involved in this, (although they’re probably NOT the same ones as we bailed out – they’ll be in countries all around the world), and speculators, who Gordon Brown said would be brought under control, (knowing that it can’t realistically be done).
Don’t also forget that the government need high prices because they need to rake in extra tax from somewhere to replace all that disappearing tax as companies go bust and welfare payments rise. Their policy is, quite simply, that we should all be happy to pay more so that the government can then give the tax back to “hard working families” who find themselves in a financial position beyond their control.
And finally, I think you’ll find that diesel is the denser product, lower in the cracking chain and thus should be cheaper than petrol, by a large margin. But it isn’t, because tax is calculated on calorific density rather than straight volume. But the differential is skewed, again due to the government trying to get as much tax as possible from the large rise in diesel-powered vehicles.
In short – consumers are being taken for an expensive ride, quite literally.
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this is all Labours fault
lets slash taxes now especially on petrol
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Hi Reality.
Excellent reply in #17
Also:
Where you say:
And finally, I think you’ll find that diesel is the denser product, lower in the cracking chain and thus should be cheaper than petrol, by a large margin. But it isn’t, because tax is calculated on calorific density rather than straight volume. But the differential is skewed, again due to the government trying to get as much tax as possible from the large rise in diesel-powered vehicles.
Diesel, and other similar fuels are of course denser than petrol. They occur lower down the refining chain, going down towards lubricating oils, tar etc etc (down = higher density / higher boiling point)
And …
When I first started using diesel cars back in 1987 or so, diesel was about £1.29 a gallon, and petrol about £1.70 a gallon.
NOW: that WAS a STAGGERING difference in price, some 50p or more (about a third cheaper!!) and of course now diesel is MORE expensive than petrol, and WHY??
(Don’t forget also that diesel engines at that time gave almost double MPG – i went from 26 MPG using petrol, to over 50MPG on diesel )
I can only think of one real reason,
(Cracking aside (cracking = the ability to modify the molecular structure of the hydrocarbon molecular chain),
and that is:
The amount of lighter products, such as petrol / gasesous products derived from a given amount of crude oil cannot be entirely controlled or eliminated.
So …
Therefore.
IF we WANT / NEED to , or MUST HAVE proportionally more “important” fuels such as Aviation fuel and diesel, both of which are used for transport and military use etc, then this would imply that a “certain volume of petrol etc will be produced as a result”,
(i.e almost as a waste by-product **)
AND … IF
The price of diesel had NOT been artifically increased, then the market for the “waste product” of petrol would have diminished, and the oil companies would have ended up with vast amounts of “unwanted” petrol?
**
In fact, when crude oil was first discovered back in tha late part og the 19th Century, the lighter products such as gas / petrol were considered too volatile for use.
It wasn’t until the internal combustion engine arrived that there was any perceived use!!
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cant the govenrment nationalise the oil companies to stop this ?
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your all over complicating it the simple answer is its all tax
because labour loves nurses and loves paying them 30 odd grand a year, thats why your petrol tax is so high
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Why all the science and costings? People will still pay the asking price? Some may do a few less miles, and shop goods will also cost more as transport rates rise. And people will do nothing about it – we never do. For once it is time to follow the French example.
Unless there is someone out there who will organise motorway go slows, and road blocks day after day until the government sit up and take note, nothing will happen.
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What is all this trying to work out global economics with regards to petrol prices?
It’s summer once again, and as everyone knows the petrol companies hike the prices when they think they can make the most out of motorists. Last years highs were in the summer and I’m sure other highs were in mostly summer months as well.
Can anyone explain any different?
Can anyone explain why diesel suddenly went 10p per ltr more than petrol, and now petrol has now caught up – NO, thought they couldn’t.
Dick Turpins relations obviously work for the petrol companies
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Dave Jay said “Unless there is someone out there who will organise motorway go slows, and road blocks day after day until the government sit up and take note, nothing will happen.”
I thought cyclists were already doing that.
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