Fears for petrol prices as oil hits two-year high - Business News - Business - The Independent

Fears for petrol prices as oil hits two-year high

Hard-pressed UK consumers look set to be hit by further increases in fuel costs in 2011 after the price of crude oil touched its highest level for more than two years on London's futures market yesterday.

The rise in the price of crude oil is being driven in part by comments over the weekend by the Arab group within the Organisation of the Petroleum Exporting Countries, which said that all its members were unlikely to meet until June to discuss quotas.

In London, Brent crude oil futures jumped by 44 cents to $94.21 (£61.25) a barrel – a 26-month high – on the futures exchange in early trading. While it eased back later to $93.98 following further reaction to China raising interest rates on Christmas Day, the pressure on oil prices appears to be heading in only one direction.

On the prospects of this upward movement pushing UK petrol prices higher, an AA spokesman said: "It is absolutely blinking horrible news for motorists." He added that even without any increase driven by world markets, UK motorists face a 0.76p rise in fuel duty – upon which they also pay VAT – on 1 January. Three days later, petrol prices will rise higher when the actual rate of VAT goes up from 17.5 per cent to 20 per cent. Oil prices are up by almost 30 per cent since September, pushing up both pump prices and wholesale gas costs, having hit a low of around $40 a barrel at the end of 2008.

The worry among economists is that higher oil prices – which hit both the fuel industry and the household gas and electricity sectors – will further drive up inflation and hamper the global economic recovery. According to the AA, the cost of unleaded petrol is now at a new record high of 123.26p a litre, up 14 per cent on a year ago.

The price of a litre of diesel is 127.47p, but this is still below a high of 135p in 2008. The AA spokesman said it was unclear whether the recent spike in oil prices was a long-term trend or if it was being driven by "short-term speculators in the market". The futures price of light sweet crude for delivery in February fell by 59 cents to $90.92 a barrel in early trading on the New York Mercantile Exchange yesterday, reflecting concerns over a dip in demand for fuel in China after the country's interest rate rise at the weekend.

Soaring petrol prices come at a bad time for UK consumers, who are battling inflation of 3.3 per cent. Three weeks ago, Npower became the latest of the "big six" energy providers to increase its prices – taking electricity and gas tariffs up by an average of 5 per cent in the new year – following similar increases from British Gas, ScottishPower, and Scottish and Southern Energy in recent weeks. According to Asda Income Tracker, transport is the "main contributing factor putting downward pressure on family spending power", giving families £174 per week to spend in November, down £6 on last year.

News
John Travolta is a qualified airline captain and employed the pilot with his company, Alto
people'That was the lowest I’d ever felt'
Life and Style
healthIt isn’t greasy. It doesn’t smell. And moreover, it costs nothing
Arts and Entertainment
Emma Thompson and Bryn Terfel are bringing Sweeney Todd: The Demon Barber of Fleet Street to the London Coliseum
theatre

Returning to the stage after 20 years makes actress feel 'nauseous'

News
peopleThe Times of India said actress should treat it as a 'compliment'
PROMOTED VIDEO
Property
Home body: Badger stays safe indoors
property
News
The programme sees four specialists creating what they believe are three perfect couples, based on scientific matchmaking. The couples will not meet until they walk down the aisle together
tvUK wedding show jilted
Arts and Entertainment
US pop diva Jennifer Lopez sang “Happy Birthday” to Gurbanguly Berdimuhamedow, president of Turkmenistan
musicCorporate gigs become key source of musicians' income
Arts and Entertainment
You've been framed: Henri Matisse's colourful cut-outs at Tate Modern
artWhat makes a smash-hit art show
News
ebooksAn unforgettable anthology of contemporary reportage
Arts and Entertainment
While many films were released, few managed to match the success of James Bond blockbuster 'Skyfall'
filmsDaniel Craig believed to be donning skis as 007 for first time
Student
The Guildhall School of Music and Drama is to offer a BA degree in Performance and Creative Enterprise
student

Top conservatoire offers ‘groundbreaking’ arts degree

Sport
Mikel Arteta pictured during Borussia Dortmund vs Arsenal
champions league
Voices
Yes supporters gather outside the Usher Hall, which is hosting a Night for Scotland in Edinburgh
voicesBen Judah: Is there a third option for England and Scotland that keeps everyone happy?
Arts and Entertainment
Pulp-fiction lover: Jarvis Cocker
booksJarvis Cocker on Richard Brautigan
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Recruitment Consultant - Soho - IT, Pharma, Public Sector

£20000 - £25000 per annum + OTE £35,000 first year: SThree: The SThree group i...

Sales Executive

£20 - 24k (Uncapped Commission - £35k Year 1 OTE): Guru Careers: We are seekin...

Payroll & Accounts Assistant

£20 - 24k + Benefits: Guru Careers: This is a great opportunity for an enthusi...

SQL Developer - Watford/NW London - £280 - £320 p/d - 6 months

£280 - £320 per day: Ashdown Group: The Ashdown Group have been engaged by a l...

Day In a Page

Mystery of the Ground Zero wedding photo

A shot in the dark

Mystery of the wedding photo from Ground Zero
His life, the universe and everything

His life, the universe and everything

New biography sheds light on comic genius of Douglas Adams
Save us from small screen superheroes

Save us from small screen superheroes

Shows like Agents of S.H.I.E.L.D are little more than marketing tools
Reach for the skies

Reach for the skies

From pools to football pitches, rooftop living is looking up
These are the 12 best hotel spas in the UK

12 best hotel spas in the UK

Some hotels go all out on facilities; others stand out for the sheer quality of treatments
These Iranian-controlled Shia militias used to specialise in killing American soldiers. Now they are fighting Isis, backed up by US airstrikes

Widespread fear of Isis is producing strange bedfellows

Iranian-controlled Shia militias that used to kill American soldiers are now fighting Isis, helped by US airstrikes
Topshop goes part Athena poster, part last spring Prada

Topshop goes part Athena poster, part last spring Prada

Shoppers don't come to Topshop for the unique
How to make a Lego masterpiece

How to make a Lego masterpiece

Toy breaks out of the nursery and heads for the gallery
Meet the ‘Endies’ – city dwellers who are too poor to have fun

Meet the ‘Endies’ – city dwellers who are too poor to have fun

Urbanites are cursed with an acronym pointing to Employed but No Disposable Income or Savings
Paisley’s decision to make peace with IRA enemies might remind the Arabs of Sadat

Ian Paisley’s decision to make peace with his IRA enemies

His Save Ulster from Sodomy campaign would surely have been supported by many a Sunni imam
'She was a singer, a superstar, an addict, but to me, her mother, she is simply Amy'

'She was a singer, a superstar, an addict, but to me, her mother, she is simply Amy'

Exclusive extract from Janis Winehouse's poignant new memoir
Is this the role to win Cumberbatch an Oscar?

Is this the role to win Cumberbatch an Oscar?

The Imitation Game, film review
England and Roy Hodgson take a joint step towards redemption in Basel

England and Hodgson take a joint step towards redemption

Welbeck double puts England on the road to Euro 2016
Relatives fight over Vivian Maier’s rare photos

Relatives fight over Vivian Maier’s rare photos

Pictures removed from public view as courts decide ownership
‘Fashion has to be fun. It’s a big business, not a cure for cancer’

‘Fashion has to be fun. It’s a big business, not a cure for cancer’

Donatella Versace at New York Fashion Week