UK: PETROL could soon cost 4 a gallon because of soaring crude oil prices : LUSENET : TB2K spinoff uncensored : One Thread

Source: Daily Mail Publication date: Mar 04, 2000

PETROL could soon cost 4 a gallon because of soaring crude oil prices, drivers were warned yesterday. The news brought calls for the Government to ease the burden on those most hard hit particularly people in rural areas.

This week crude rose to a nine-year high of $32 a barrel just over 20 amid accusations that the world's major oil producing nations are ruthlessly forcing up prices.

Experts believe that this, coupled with price rises in the Budget on March 21, will mean an increase on the forecourt of around 28p a gallon or 6p a litre over the next three months and 4 by the late summer.

Chancellor Gordon Brown is also certain to raise prices significantly to fund Treasury spending pledges. According to latest figures from the Automobile Association, the average forecourt price of unleaded petrol is now 76p per litre 3.46 a gallon with almost 80 per cent of the price comprising taxation. In remote areas of Scotland the price is even higher at 80pence per litre, 3.64 a gallon.

Edmund King, executive director of the RAC Foundation confirmed fears of the 4 gallon yesterday, saying: 'It's likely we will see that price within six months.' He added: 'The problem is when prices rise the oil companies are quick to pass on the rises, but when they drop, as they have done on several occasions, they do not act so swiftly to pass on decreases to the pumps.

'Gordon Brown probably didn't bank on these increases. If he increases petrol above inflation in the Budget he will be extremely unpopular.' The Opec trade cartel, which controls 40 per cent of the world's production, is accused of bringing on the 'crippling' escalation by deliberately restricting supply. Crude oil prices have trebled in a year.

Even in the U.S., where drivers have traditionally enjoyed paying less than $1 a gallon for fuel, motorists are being hit hard. In some areas prices have risen by 50 per cent.

President Clinton has said he would be prepared to consider releasing oil from U.S. emergency stockpiles to lower petrol prices if Opec fails to take appropriate action when the cartel meets on March 27.

Opec yesterday attempted to calm global concern by promising an increase in supply. But no details have been revealed and any dramatic action has been ruled out.

An AA spokesman said: 'Prices of petrol are now being pushed past what the Government would be comfortable with and they have no control over it.

'Driving is not a luxury, it is an essential. The problem is these increases hit people who can ill afford it, like people on low incomes and those in rural areas.'Keith Green-head, fuels director of PHH, Britain's biggest fuel and fleet car management company, thought the 4 mark could be staved off until the end of the year.

'The Opec producers understand they are getting perilously close to the point where they could trigger global recession and that will come back and bite them,' he said.

'They are walking a delicate line between putting prices as high as they dare and triggering retaliatory action or recession.' Yet while motorists suffer, the oil firms continue to make huge profits.

In February the surge in the price of crude was credited with making BP Amoco record quarterly profits of 1.33billion.

Ruth Lea, policy head at the Institute of Directors said the price rise would hit every consumer in Britain because of the knock-on effect on businesses.

'Even firms who trade on the Internet will be hit, because a lorry has to deliver goods once they've been ordered,' she said.

DRIVERS of older polluting cars should be offered up to 750 compensation or three years' worth of public transport vouchers to scrap them, says a top Government transport adviser.

Councils should also create clean air zones where cars without catalytic converters would be banned, says Professor David Begg, chairman of the Commission for Integrated Transport.

A commission report on improving air quality in inner cities urges measures to encourage taxis, buses and lorries to take action to cut emissions.

Publication date: Mar 04, 2000 ) 2000, NewsReal, Inc.

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