Petrol may hit £1.50 a litre, warns expert
Petrol prices could soar to £1.50 a litre by Christmas, a markets expert from the Black Country warned today.
Petrol prices could soar to £1.50 a litre by Christmas, a markets expert from the Black Country warned today.
Unrest in the Middle East is pushing up the price of oil, increasing prices up at forecourts in this country.
The prediction of £1.50 a litre equates to well over £6.50 a gallon — and would be an increase at the pumps of around 40 per cent in 18 months. Unleaded petrol prices in the West Midlands today stand between £1.25 and £1.32 a litre. The cheapest diesel is £1.30 and the most expensive £1.37.
Richard Mottram, of Wolverhampton stockbrokers Redmayne Bentley, said: "The unrest in North Africa and the Arab world has already resulted in oil prices rising — the price of Brent crude has topped $106 a barrel this week.
"Oil is now at its highest level since September 2008. Oil at $105 a barrel was expected to add 4.5p a gallon to petrol prices, or just over 1p per litre.
"But it has already broken through this level, and the next stop may be $110 per barrel, which would add roughly 9p per gallon or 2p per litre.
"Prices could quickly rise to 135p on oil above $110 a barrel," said Richard.
"One expert is predicting $150 a barrel by the year end, with petrol closer to 145p-150p per litre, if things escalate."
What happens next to fuel prices depends on a number of factors, he said.
"Analysts point to the fact that oil prices were on the up even before the turmoil. Any threat to oil production could, therefore, lead to a further spike in prices.
"We believe a potentially bigger problem that would seriously affect the oil price lies in the fortune of Bahrain. Bahrain sits at the mouth of the Straits of Hormuz, through which millions of barrels of oil a year are shipped out on supertankers.
"Strategically, Bahrain is hugely important. It is also where the American Navy has its largest fleet in the area.
"If the US is forced to leave Bahrain then it is almost certain that Iran will look to exert more influence over the kingdom.
"The thought of Iran controlling the flow of oil through the Straits of Hormuz would, in our opinion, result in a surge in prices way above current levels."