Motorists hit by record petrol prices in forecourt
Millions of drivers hitting the road for the Christmas getaway faced more misery at the petrol pump today as oil prices surged to a two-year high.
Long-suffering motorists are already stumping up record prices on the forecourt but petrol will be even dearer after Brent crude hit $94.58 a barrel — the highest since October 2008.
According to the AA's latest figures, average petrol prices are at an all-time high above 123p a litre. The fuel duty increase on January 1 and the VAT rise to 20% days later will add at least 3.5p to this, it estimates.
Oil has been driven higher by increased demand because of the freezing weather as well as reduced supplies from the North Sea. JPMorgan analysts predict it could return to $100 a barrel, driven by strong demand from emerging economies and a weak dollar.
The present price surge also gives Bank of England inflation watchers a headache, as they have warned that inflation could rise to 4% by next spring. Members of oil cartel Opec are meeting this weekend to discuss production and prices but will make no decision on whether to lift output until next June.
National Australia Bank commodities analyst Ben Westmore said: "Once you get around $100 per barrel, if it is sustained and the economic growth profiles of the US, UK, Japan and the eurozone look weak, then at that point you might see some action."
