RMI Petrol has warned that fuel prices are likely to rise by up to 8% by the start of 2011. Motorists are also expected to see a hike of 3% at the
pumps by this Bank Holiday weekend. Currency movements and oil price increases have been blamed, along with hikes in VAT and duty. RMI Petrol said prices had fallen to an average of 116.65ppl over the last couple of months for unleaded and 119.17ppl for diesel – largely as a result of the 10% real improvement in exchange rate between Sterling and the US dollar.
For much of this time, crude oil prices had been oscillating around the $72/73 per barrel mark.
It added that crude oil prices had now started a sharp upward curve again and on Sunday reached a new three-month high close to $82 per barrel while Sterling showed a hint of weakness against the Dollar for the first time in several weeks.
It added: "Our members are predicting fuel prices could rise to as high as 125.9ppl in the New Year, smashing the current record high of 121.61ppl, when the double rise in Duty and the rise in VAT are factored into the projections."
Brian Madderson, chairman of RMI Petrol, said: "The rebound in crude oil pricing is disappointing but not entirely unexpected. It will further increase pressure on independent retailers who are fighting for survival, especially in rural areas, due to the double hit of falling volumes and tighter margins. This crude oil increase will feed through the supply chain and could result in prices going up by as much as 4ppl in the next three weeks.
"We also need to remember that the Coalition did not cancel the Labour Government’s budget commitment to raising fuel duty by 1ppl from 1 October and a further 0.76ppl from 1 January – both to have 17.5% VAT added.
"Then we have the Coalition’s emergency budget proposal to increase VAT to 20% from 4 January so the outlook remains extremely difficult for motorists and retailers alike. As I forecast earlier this summer, we could be seeing new record pump prices within six months.
"All these trends will add to inflationary pressures in our market and across the economy, threatening higher interest rates in the medium term."