UK fuel prices
Fuel costs have escalated. What's the story behind the increase?
The £1.50 litre is just around the corner. That’s what experts at the price comparison website petrolprices.com are predicting we’ll be paying for unleaded by September.
Both Shell and BP recently announced record first-quarter profits of £3.9 and £3.3 billion respectively, but they make the vast majority of their profits ‘upstream’, mining and extracting the fuel before selling it on to the markets. ‘Crude oil prices stood at $40 [£20] a barrel four years ago,’ Petrolprices spokesperson Louise Doherty told us, ‘but now they’ve passed $120 [£60]. With the government adding over 60 per cent tax to basic fuel costs, that accounts for the lion’s share of the increases.’
So what’s driving up the price of crude? According to the RAC Foundation, three things: increased demand from fast developing countries such as India and China, instability in key producing nations such as Nigeria, Angola and Iraq, plus threats closer to home such as the recent strike at the Grangemouth oil refinery.
Add to this the looming threat of a 2p per litre increase in fuel duty this October and it doesn’t look like we’ll be seeing smaller numbers at the pumps any time soon.
