4:00am UK, Saturday December 11, 2010
Petrol prices have hit a record high in Britain with unleaded costing an average of 121.76p a litre - with further increases in the pipeline, according to the AA.
president Edmund King believes more rises are inevitable next year, thanks to the hike in VAT to 20% in January coupled with another planned fuel duty increase.
He told Sky News: "The coalition inherited the (planned) fuel duty increases from the last government - not VAT.
"You can't do both. A double whammy of extra tax won't help economic recovery if transport costs keep rising".
The Freight Transport Association (FTA) says additional costs on its members would be "unsustainable".
Source: AA
But the big question is - why are prices so high when the price of a barrel of crude oil is well below its peak of $145 in July 2008? It now stands at about $90.
As if the snow wasn't enough motorists are having to pay more for fuel than than ever
Retailers blame the wholesale prices they are paying refineries for unleaded and diesel.
They deny profiteering and argue that while their own unleaded costs have risen by 1.5p-a-litre in the last week, the margin retained by petrol stations has fallen as low as 3p a litre.
One factor behind the increases is the pound's lower value against the US dollar.
Fuel duty hikes are set to continue, with the Treasury planning 1p above-inflation rises over the next four years.
Whatever the causes, the fact remains motorists have been hit by an 11p a litre rise at the pumps over the course of 2010 for unleaded.
Diesel currently remains well below its record high of 133.25p, set in July 2008.
The Office of Fair Trading has told Sky News it is not currently investigating fuel prices on either price or competition grounds.
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