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Oil prices rocked by Middle East unrest

03 March, 2011
Page 4 

Fuel prices are set to rocket by up to 10ppl in the coming months as oil prices rocket following bloodshed in Libya, according to warnings issued by RMI Petrol.

Brian Madderson, RMIP chairman, said: "Following the turmoil and violence in Libya in recent days Brent crude oil prices have reached $110 per barrel. We predict that this rise will filter through to petrol forecourts over the next few weeks, leading to an estimated 5ppl increase by April 1.

"This is further bad news for motorists and forecourts as this increase looks set to coincide with the introduction of the previous Government's ill-thought-out fuel duty escalator adding a further 5ppl at the pump in total a 10ppl jump.

"The RMI once again urges the government to abandon plans to introduce this fuel duty escalator which will impact directly on inflation, businesses and consumers."

Madderson added that windfall tax arising from North Sea Oil revenues and 20% VAT on increasing prices at the pump should provide adequate room for the Treasury to offset any further direct tax on the forecourts.

He said: "The Fair Fuel Stabiliser is a concept needing much further study and engagement with industry so is unlikely to be introduced in the March Budget."

Madderson also believes the Government's current fuel tax policies could directly result in the Treasury missing out on up to 1.2 billion of tax revenue as well as jeopardising the UK's important and petrol forecourt and haulage industries.

"With the growing number of high-performance cars, trucks and vans on the road, diesel has overtaken petrol with a 55% share of UK road fuels, hitting a recent high of 134.57ppl, exceeding the previous record highs of 133.25ppl in July 2008," he said. "This further widens the gap in diesel prices between the UK and the near Continent, for example diesel prices in Luxembourg were 30% lower at the end of January."