Petrol prices could reach a record average high of £1.20 a litre in the next few weeks, according to the AA. The motoring organisation says an increase in wholesale prices since the start of 2010, with a rise of 17 per cent in the past month, is fuelling the rise. It wants the Chancellor Alistair Darling to postpone the introduction of a planned 3p rise in petrol duty due to come in on 1 April, and for the government to investigate the sharp rise.
"Before this wholesale price surge works it way through to consumer spending and hits economic revival, the AA believes the Government should look at what is behind it," said Edmund King, president of the AA. A lack of refining capacity in Europe and a weakened pound are being held responsible for the fact that, although petrol prices have risen, the current oil price of about $80 a barrel is still below the $147-a-barrel high seen in 2008 when petrol prices were close to current levels.
"The UK is barely out of recession yet petrol prices threaten to rise to record prices seen during the boom of 2008 - shortly before the collapse into recession. If families, drivers on fixed incomes and those on low pay were unable to cope with record prices then, they are even less likely now," Mr King added. Some petrol stations in central London, as well as remote areas of Scotland which face higher distribution costs, are already charging £1.20.
