Petrol prices are set to soar again

Petrol prices could soar by 8% by the beginning of next year, it was predicted today.

And the cost of filling up at the pumps could rise by 3% by this August Bank Holiday weekend.

The warning to motorists came from the Retail Motor Industry Independent Petrol Retailers Association (RMI Petrol).

It put the blame for the expected rises on currency movements and world oil price increases.

RMI Petrol, which represents around two-thirds of Britain's 9,000 petrol forecourt sites, said petrol prices could rise as high as 125.9p per litre in the new year, smashing the current record high of 121.61p.

This increase would take into account the rise in VAT and the planned hike in fuel duty.

RMI Petrol chairman Brian Madderson 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 4p a litre in the next three weeks."

He went on: "We also need to remember that the coalition Government did not cancel Labour's Budget commitment to raising fuel duty by 1p a litre from October 1 and a further 0.76p from January 1, with both having VAT added.

"Then we have the coalition's emergency Budget proposal to increase VAT to 20% from January 4, 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."