Fuel price hike blow
CAMPAIGNERS have described ever-escalating fuel prices as a “body blow” to rural people and businesses as they reached a record peak. Petrol prices have soared to an all time high of 120p a litre, eclipsing the previous peak of 119.
CAMPAIGNERS have described ever-escalating fuel prices as a “body blow” to rural people and businesses as they reached a record peak.
Petrol prices have soared to an all time high of 120p a litre, eclipsing the previous peak of 119.7p reached in July 2008, the RAC said.
And motorists and businesses have been warned there is no end in sight with a weak pound and increasing global demand for oil set to drive pump prices even higher.
RAC motoring strategist Adrian Tink described it as a “dark day for motorists” and said that in some areas drivers will be paying close to �6 a gallon (131.9p a litre).
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He said: “Petrol prices have been rising steadily over the past year and have now reached the inevitable record high.
“With the election campaign now in full swing, Britain's hard-pressed motorists will be keen to hear what the political parties have to say about the escalating petrol prices. This is a key issue for Britain's 32 million motorists, who are watching their bank accounts drained every time they fill up.”
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Alice Barnard, from the Countryside Alliance, said that people in Norfolk are likely to be hit hard.
“This latest price hike is going to come as a body blow to rural people and businesses,” she said.
“Anyone living in rural Norfolk will tell you it is impossible to live without a car - whether on the school run, to the doctor, or around the farm, car ownership is a necessity not a luxury.
“The Countryside Alliance is increasingly concerned at the unfair disadvantage rural people are placed at when it comes to high fuel prices.
“The isolated, elderly and those on low incomes are especially vulnerable to the rocketing prices in a clear case of hitting hardest those who don't have a choice.
“We are less than a month away from having a new government and it is essential that they address this inequality as a priority.”
Charles Trotman, head of rural business development at the Country Land and Business Association, said: “Rural businesses are regarding this as a major issue. If petrol prices go up logistic costs increase which means the price of getting the product to market increases. The price of the product will then have to increase and that will impact on inflation.”
He added: “If there is a hung parliament that is going to put the jitters into the financial markets and make life even worse.”
The new record comes just days after the government raised fuel duty by 1p a litre. A further 1p rise is due in the autumn, with a 0.76p increase planned for next January.
The RAC said the fuel price increase had been caused by a combination of factors.
Primarily, the weak pound and the increase in the wholesale price of fuel had produced a steady rise since the beginning of the year. Also tax rises since December 2008 have added around 10p to the cost of a litre of fuel.
Currently the average price of a litre of unleaded is 120p - of which 76p or 63pc is tax.
But in comparison the highest proportion of tax paid at the pumps came in April 1998 when the average price of a litre of unleaded was 65.6p - of which 54p or 82.1pc was tax.
The AA said petrol was now just over 10p a litre more than at the beginning of the year, adding more than �5 to the cost of filling a typical 50-litre tank.
AA public affairs head Paul Watters said: “For many drivers, the record price underlines what they already know - the cost of petrol is becoming increasingly unsustainable.
“Comments from retailers confirm research from the AA showing that two-thirds of its members are cutting back to compensate for soaring petrol prices.
“With some retailers putting up their prices and then bringing them back down over the Easter weekend, the UK road fuel market is clearly at a watershed - and there will be casualties among retailers and motorists.”
He added: “We can only hope that the May 6 election produces a result that strengthens the pound and puts downward pressure on pump prices. With potential consumer spending that would help fuel economic recovery being siphoned off at the pump, the stakes are high.”
The AA also said the wholesale price of petrol has broken through the 800 dollars a tonne mark for the first time since October 2008.
It said that, with the pound 13.5pc weaker now than 18 months ago, it was likely that the pump price of petrol would rise another 1p to around 121p a litre.
Brian Madderson, chairman of RMI Petrol, formerly the Petrol Retailers Association, highlighted two main issues affecting filling stations in East Anglia.
“One is the proposed business rates for petrol filling stations which came into effect on April 1,” he said. “These are really penal.
“Then we have got successive increases in fuel price which mean that motorists are now definitely starting to cut back on the discretionary part of their driving.
“Volumes around the country are definitely lower than this time last year. This is partly due to the recession and partly due to high fuel prices.
“People are worried. We can only see prices going up further from this new record level.”
Mr Madderson said of the price hikes: “It is because we have a weak pound and the global price of oil is increasing as demand in China and India and other nations starts to rebuild after the recession. There is no end in sight.”
Andrew Lawrence, a member of the Independent Petrol Retailers Association, who operates several filling stations across the county, described the situation as a “nightmare”.
“Like our customers we are really waiting for it to ease off,” he said. “It really does need some confidence in the market place for it to slow up.
“For confidence we need to make sure there are no speculators knocking about and for sterling to get a bit stronger to enable us to buy oil a bit cheaper, but there is uncertainty because of the election and sterling is still a bit twitchy.”
Mr Lawrence described the situation as volatile and added: “As independent retailers we are desperate for it to come down because it is costing us a bucket.
“We have got to find the money to pay for the tankers on top of everything else like business rates. The whole thing is a bit of a nightmare. I have never known margins as tight. I think people are using their cars less or at least thinking about it.”