The Financial Blog

Experts are warning that petrol prices will hit £1.50 a litre this year if the rise in crude oil prices continues.

For every £1.00 we pay a staggering £0.70 goes to the government in fuel duty and VAT. With prices at the pumps already increased by 20 per cent in the last 12 months this will only put further strain on family finances.

I think it’s absolutely disgusting that we pay such high tax on fuel compared to the rest of the world. It will make running a fairly ‘standard’ small car as costly as some of the bigger more expensive saloon cars.

For example to fill the tank of a Peugeot 206 1.9 litre, diesel engine it costs around £53. Last year this would have cost just £43. If we do hit £1.50 a litre this will rise to £75! For many people this will be the weekly cost of running a car just so they can get to work, £300 a month! That’s what I paid for my first mortgage about 5 years ago. It’s absolutely ridiculous.

Managing director of the website Petrolprices.com, Brendan McLoughlin said “If these conditions in the crude oil market continue, we will hit £1.50 a litre this year.

Chancellor Alistair Darling is planning two further fuel duty increases by October and with such worldwide economic instability, oil prices are likely to rise in the future.

The last time oil hit $100 a barrel it was artificially inflated by a rogue trader wanting to claim his place in history as the first to buy oil at such a landmark price.

This time the price has jumped as a result of speculation over conflict in Nigeria, a refinery explosion in Texas, market traders using commodities as a way to protect themselves against a weak dollar and fears that OPEC (the Organisation of Petroleum Exporting Countries) will cut production because oil reserves are drying up.”

This entry was posted on Friday, February 22nd, 2008 at 2:34 pm and is filed under Tax. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.