A 17% rise in European wholesale petrol prices since late January is threatening to push UK average pump prices above the July 2008 record,
the AA has warned and is calling on the Government to investigate the sudden surge.
A weaker pound is aggravating the potential for price rises, with 120p a litre possible – even before the Government is scheduled on April 1 to add 3p in fuel duty and VAT on to the cost of petrol and diesel.
When UK petrol prices levelled at 112p a litre for almost a month in late January and February this year, wholesale petrol prices stabilised around $680 a tonne. By the end of last week, wholesale prices had reached $795, a 16.9% increase. This and a weaker pound have lifted the wholesale price in pence per litre from around 32p a litre to above 39p a litre. With VAT, that could add 8p to the January/February price.
On Sunday, average UK petrol prices rose to 115.93p a litre and, compared to late January/early February prices, the price of a tank of petrol could increase by £4. A family with two petrol cars could see the monthly cost of fuel rise £16.99 above what it was earlier this year.
"The UK is barely out of recession yet petrol prices threaten to rise to record prices seen during the boom of 2008 – shortly before the collapse into recession. If families, drivers on fixed incomes and those on low pay were unable to cope with record prices then, they are even less likely now," says Edmund King, the AA’s president.
"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."