UK gasoline price hits record high

by Michael Smith (Veshengro)

The Automobile Association (AA) has joined others calling for British Chancellor of the Exchequer, George Osborne, to scrap the next planned increase in fuel duty on April 1, 2011.

Pump prices hit record levels on Friday 28 January 2011, piling pressure on the government to cut fuel duty.

Fuel has now passed the previous high seen in the summer of 2008, pushed up by a combination of a near $100 per barrel crude oil value and a succession of tax increases and the average price of diesel has hit £1.34 a liter and gasoline is at £1.29 a litre.

This means that it costs more than £60 to fill up even a small family car; and I doubt that people with slightly larger cars will get away with less than £80-£100 to fill up the tank.

How people will be able to continue with business-as-usual commuting to work in London from places several hundreds of miles away beats me.

If this is anything to go by – though some of the increases at the pump could also be due to the recent increase in VAT (sales tax) from 17.5% to 20% – then the members of the think tanks that suggest that we could be reaching the £15 to £20 an Imperial gallon of gasoline and diesel within the next couple of years could be right.

Some of the price increase does have to be laid at the rise in crude oil prices and with the issues in Tunisia, which have now spread to Egypt, and could spread to other Middle East countries, the price of crude go well about the $100 a barrel mark.

Motoring organizations said that the new diesel price meant that drivers were paying nigh on 20 pence per litre more than a year ago, adding £9.61 to the cost of a typical 50-litre refill.

The soaring price of gasoline and diesel can be expected to trigger anger against BP and Shell when they announce big increases in profits next week. US oil group, Chevron, has just reported a 72% increase in fourth-quarter income to $5.3bn.

The cost of heating oil has risen by about 75% this winter and the price is still rising and therefore there are other people even worse off than the “poor” motorists.

In rural areas of Britain central heatings are predominately run on heating oil and it is becoming more and more expensive for people living there to heat their homes. In addition to that thefts from domestic heating tanks are being reported all across the country, which are fuelled – pardon the pun – by the cost of diesel and, despite the fact that there is a dye in heating fuel in the same way as in agricultural use only diesel, this oil is finding its way onto the black market as diesel.

As far as I am concerned this all points to rather troubling times ahead and, personally, though I hate to be the harbinger of doom, I do not believe that it will get better either, especially if the likes of the ITPOES people are to be believed.

© 2011