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Price of petrol ‘may go up 4p’

January 26th, 2013 Bussines

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Fuel campaigners are warning that petrol prices might jump 4p per litre “in coming days”.

The Petrol Retailers Association (PRA) say a “full review” of the wholesale fuel market are needed.

The AA said a review would help to tackle the “fuel industry’s treatment of drivers, consumers and businesses”.

Next week the Office of Fair Trading (OFT) is due to report on whether reductions in the price of crude oil are being passed on to drivers.

The OFT is set to announced whether a full investigation of fuel prices is needed.

‘Help consumers’

The PRA said “despite recent arctic weather cutting fuel demand across northern Europe and refinery chiefs complaining at their glut of petrol capacity”, wholesale costs had risen by 5p per litre in the four weeks since Christmas.

Average prices at the pumps had gone up by around 1p – according to Experian Catalist figures – so drivers now faced another 4p per litre rise, it said.

PRA chairman Brian Madderson said: “The shock rise in wholesale costs is just one of the reasons why the Petrol Retailers’ Assocation has been knocking on the door of the Office for Fair Trading, since this time last year, to demand a full investigation into the workings of the UK market for road fuel”.

He said retailers across the country – who had already “been soaking up this increase” for motorists – would be forced to put their prices up over the coming days and weeks, with some already doing so.

Mr Madderson said: “Once again we are going to be accused of profiteering at the pumps when that is simply not true.”

He urged the OFT “to step out from the shadows and help consumers by conducting a full market study that will lift the veil of secrecy from the wholesale cost movements”.

He also called on Chancellor George Osborne to abandon plans for a fuel duty rise in September 2013, “if fuel costs continue to rise”.

‘Cataclysmic’

Motoring journalist Quentin Wilson said: “A 4p rise is going to be cataclysmic for motorists, for families, for businesses across the UK.

Mr Wilson, who is also a campaigner for Fair Fuel UK, said: “In some parts of the country we are seeing diesel as high as 148p so this will tip it over the psychological threshold of 150p…and it’s unsupportable.”

Meanwhile, the AA said drivers were again picking up rising petrol bills, with retailers often reluctant to pass on savings when the cost of petrol is falling.

AA president Edmund King said: “Another new year, another new round of pump price rises after the industry failed to pass on fully wholesale price savings.

“The Office of Fair Trading decides soon whether to launch an investigation into fuel prices, hopefully tackling the fuel industry’s treatment of drivers, consumers and businesses.”

He added: “The insight we are now getting on wholesale price movements rams home the need for this information to be out in the public domain immediately.

“Wholesale petrol prices turned upward in the first week of January, average pump prices six days later. If falls in wholesale were reflected as quickly, no-one would mind – but they’re not.”

The chief executive of the Road Haulage Association, Geoff Dunning, said increases in the cost of fuel affect the economy in two ways: “One is, obviously, for the person in the street when they’re buying fuel, they spend more on fuel and therefore can spend less on other things – on food, on clothes, on anything else – and the other effect is that the price of fuel affects the price of goods in the shop, because everything that’s delivered to the shop comes in a truck.”