Petrol prices 'could reach 140p a litre' say retailers
Sharp movements in the price of oil have raised concerns that the price of unleaded petrol could jump to 140p a litre, retailers have said.
Fuel costs are already at record levels with unleaded petrol standing at 129p a litre on average.
Retailers have put out a warning that a 5p increase is in store and but it could increase further.
Crude oil has been particularly volatile in recent days, owing to unrest in key oil producing countries.
Mounting concern over Libyan supplies and speculation about protests in Saudi Arabia have affected prices.Predictions
Brent Crude has risen from under $100 a barrel two weeks ago to nearly $120 early on Thursday, before slipping back a little to around $115.
Petrol suppliers said the 5p increase they were forecasting was already working its way through the supply chain, the result of more expensive crude which has already reached the refineries.
"I can see two or three pence on the price of a litre by early next week," said Brian Madderson, of the RMI Petrol Retailers Association, which represents firms with 6,000 garage forecourts, two-thirds of the UK total.
"Then expect another 2p by the end of March."
So increases already working through the supply chain could add 5p to prices over the next few weeks.
The suppliers are also warning that the next increase in fuel duty planned by the government will add a further 5p to the cost of fuel in April, if it goes ahead.Duty
Duty increases are set in relation to predictions for inflation in the autumn, so it remains to be seen whether the rise would be quite so large.
But the combined effect of higher oil and extra duty could push unleaded close to 140p a litre.
Chancellor George Osborne has come under pressure to abandon the duty rise and ministers have made no secret of the fact that a fuel duty stabiliser has been looked at - a mechanism for cutting duty when oil prices soar.
But the Treasury refused to comment in advance of the Budget on 23 March.
The 140p level could be reached without any further dramatic increases in the cost of crude oil.
Fuel suppliers use a rule of thumb that a $2 rise in crude results in an increase of 1p in the price of petrol. On that measure, if oil approaches $140 a barrel, fuel on the forecourts could get alarmingly close to £1.50 a litre.