'Floodgates Open' for Petrol Prices
Petrol Retailers Association warn of price rises at the fuel pumps
Just when you thought it was safe to smile at the petrol station attendant without a sarcastic comment regarding ‘second mortgages’ and ‘taking food from the mouths of my children,’ retailers have predicted that petrol prices are set to rise by up to four pence a litre in the next few days.
Forecast by the Petrol Retailers Association (PRA), it is likely to happen, caused by forecourts passing on increased wholesale fuel costs to the consumer, and adding around £2 to the cost of filling up a typical family car, despite industry figures showing that the daily average selling prices in the UK have risen by less than 1p per litre for both petrol and diesel since January 1.
"Independent retailers have been soaking up this increase at the expense of already tight margins because they know how hard the motorist is squeezed," said PRA chairman Brian Madderson. "The floodgates will have to open soon."
If you are looking for some good news in this article, perhaps you might consider that it comes from the AA, who have said that a 4p a litre rise won’t happen – it is more likely to be around 2.5 pence per litre!
AA president Edmund King told the Daily Telegraph: "Another new year, another new round of pump price rises after the industry failed to pass on fully wholesale price savings.The insight we are now getting on wholesale price movements rams home the need for this information to be out in the public domain immediately."
So; no good news at all in this article. Even the fact that, with the AA accusing the fuel industry of failing to pass on falls in wholesale prices as quickly as it slams on the increases, the Office of Fair Trading has announced that it will make a decision this week as to whether or not it will be launching an investigation into the fuel market.
Despite a fall in fuel demand across northern Europe as customers look at ways of saving fuel by driving with greater care and also by making less journeys, and an apparent glut of petrol capacity, wholesale costs have risen steeply since Christmas. But it may amaze you to know that throughout the whole of 2012, the average price of a litre of petrol rose by only 2.75p.
It will come as no surprise that the Chancellor is once again coming under pressure, despite that fact that his Spring duty rise has allegedly been scrapped already.
Brian Madderson said: "If fuel costs continue to rise as our sluggish economy and loss of AAA credit rating weaken the pound sterling against the US dollar, the Chancellor must abandon plans to increase duty. Householders and businesses will be hard pressed to cope with market fluctuations let alone more Government tax intervention."
So, let’s wait and see if it happens. Odds are that it will.