Petrol prices could hit £8 a gallon by the end of the year, a leading investment bank has predicted. Oil prices are currently hovering at around $120 a barrel, but "the possibility of $150-$200 per barrel seems increasingly likely over the next six to 24 months," said Arjun Murti, a strategist at Goldman Sachs.The oil price was just $100 a barrel at the beginning of the year, so this would represent a doubling of the price within 12 months. The forecast increase would equate to more than £8 per gallon at the pump for UK motorists, nearly £9 for diesel, and probably trigger repeats of the fuel protests that dogged the government in 2000.Murti attributes the oil price 'spike' to the inability of oil suppliers to meet the increased demand from developing countries. To put the current price in perspective, the price of a barrel of oil at the time of the 9/11 attacks in the US in 2001 was just $20.
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Re: Petrol price could double in 12 months
The oil market has never been free. It's controlled by OPEC, a cartel which of oil producing nations which agrees production levels. Refinery capacity is the issue here however, I cannot believe that China and India's demand could increase by such an amount in just 12 months that the price would need to double. As far as the impact of this is concerned, the government *could* do a lot more to make the cost of living more reasonable for most people and not just car owners, but public transport operators and all those goods where prices are dependent on transport. Simply by applying VAT correctly (on the cost of fuel BEFORE duty) and by simply admitting that this macro-economic pressure is having an impact on inflation and the cost of living and actually reduce duty. Mind you, the thieving oil companies would simply not pass this on to the motorist just to pocket the difference. It's depressing that this Government seems to be smug about the cost of fuel rising more than the accelerator or their planned duty rises would ever have got away with and they are pocketing the extra revenue created without having to look bad. For those of us who have no option but to drive to work or live in areas where public transport is negligible (even if it is free for pensioners) it means that we have to think twice about every journey which limits the supposed freedom we can enjoy in this country. I am conscious of the environment, I recycle, I have an economical car, I drive responsibly however, there is no reasonable alternative - I don't want to have to take a 2 hour journey (only an hour by car) after a 10/12 hour day. If fuel prices increase much more, I'll be petitioning my employer to work from home more often so as to avoid using the car all together on economical grounds.
Re: Petrol price could double in 12 months
One aspect that no-one is talking about is the farcical situation that the government appears to be allowing, no encouraging all prices to increase (Increased taxation revenue, reduced emissions etc etc) but are not increasing the Inland Revenue allowed mileage rate for using your private car for business use. This has not been changed for years, and it's about time that Autocar pressurised the goverment to do something about it
Re: Petrol price could double in 12 months
Loather hit the nail on the head - it's not a lack of crude oil but refining capacity. As you hear oil companies making huge profits on the back of higher crude prices they are not ploughing any money back to upgrade their existing infrastructure to cater for ever increasing fuel demands.
Refineries are being milked to the point that I dare say the operators know they are at or above 100% capacity - do they care? Of course not, as soon as there is a whiff of trouble in refined fuel supply, prices go up. So what; we end up paying for it anyway because they also operate as a cartel. At current prices how does one expect China and India to afford to continue to grow? They must have a supply chain capable of easily supplying refined fuel, thereby buffering these spikes in prices that the rest of us are so susceptible to....and also are willing to put with...so who is really living in the 3rd world now....
As long as oil companies are sleeping with heads of government (eg the Bush family), this charade of the few screwing over the rest of us will continue.