Drivers facing extra 25p on a gallon
THE price of petrol will rise by about 25p a gallon 'within weeks', experts predict.
The alarming increase - reminiscent of the one which sparked the fuel protests three years ago - is due to soaring crude oil prices coupled with extra taxes.
Petrol has already risen by 10p a gallon in the past two months. The new rise will push average prices through the psychological barrier of 80p a litre.
Chancellor Gordon Brown is increasing fuel taxes by more than 5p a gallon (1.28p a litre) to plug a black hole in Government spending.
But petrol is expected to rise by a further 20p per gallon (about 4.4p per litre) after the Organisation of Petroleum Exporting Countries agreed on Wednesday to cut oil production by 3.5%. Kevin Delaney, of the
RAC Foundation, said: 'This is very much a triple whammy for the motorist.
'The combination of Opec and Chancellor Gordon Brown's tax rise could see pump prices rising by around 5p a litre - or 25p a gallon.' He said the Chancellor wins twice over - gaining not only from the increased duty, but also from VAT on the duty - a 'tax on a tax'.
According to Mr Delaney, the Opec cut means prices will rise as the U.S. buys in extra fuel to ensure supplies through the winter.
A new price survey by fleet and fuel management company Arval PHH shows that petrol has risen by an average 2p a litre (almost 10p a gallon) in the past two months. Arval said prices rose sharply in the run-up to the Gulf War early in the year before falling back.
Since reaching the year's low point of 74.6p a litre (£3.39 a gallon) in mid-July, the average price of unleaded petrol had risen to 76.57p (£3.48 a gallon).
The Chancellor's extra tax burden will take the national average price to around 77.8p a litre (£3.54 per gallon) for unleaded and 79p for diesel (£3.59).
And another 4p a litre as a result of Opec's oil hike would see petrol selling at an average of 82p a litre. But the figures disguise a disturbing reality that some garages already sell fuel at up to 84p a litre. Arval said in August 2003 the average price of unleaded petrol was 76.15p a litre. But the most expensive garages in Brora, Caithness, Scotland, and Wivelsfield, East Sussex, charged 83.9p.
The cheapest was in Shoeburyness, Essex, at 72.15p. The average price of diesel in August was 77.10p a litre, with the most expensive garage in the Isle of Arran charging 86p.
Arval's Danny Clenaghan said the rises would be bad news for both drivers and the economy.
'Making prices even higher is unlikely to win the Treasury any friends in the run-up to a general election,' he added.
A firm with a fleet of 100 petroldriven cars could see its annual fuel bill rising by about £150,000.
Businesses last night expressed alarm at the rising fuel prices and the knock-on effect on costs.
The Freight Transport Association estimated that the Chancellor's rise in fuel duty alone would add £300m to Government coffers. UK operators already pay more than the EU average.
