Stock market traders blamed after petrol soars to £1.07 a litre

Published on Tuesday 27 October 2009 21:30

DRIVERS are facing the highest fuel prices of the year because of the antics of stock market traders, a motoring group said yesterday.

Average pump prices have risen to 107.14p a litre for unleaded and 108.40p for diesel, the AA reported.

The group said both fuels had increased by more than 2p a litre in only two weeks – increasing the average cost of a tank of unleaded by 1.10.

Paul Watters, the AA's head of public affairs, hoped the rise would be a short-term blip. He said wholesale petrol prices reached 31p a litre in early September, then fell to 27.5p by the end of the month, but had now risen to 32.5p.

He said: "With the rise in wholesale prices slowing and the price of oil falling back, the AA is hoping that this is yet another spike in the pump price that will drop back.

"However, it comes as drivers see the demands of winter motoring increase their vehicles' fuel consumption.

"Although the blame lies squarely with stock market traders shifting funds from currencies to commodities, a 1.3p-a-litre rise in the pump price of petrol this week fuels driver suspicion that forecourt prices rise faster than they come down."

But Brian Madderson, the non-executive chairman of the Petrol Retailers Association, said: "Despite the pound gaining strength against the US dollar during October, cost prices to petrol retailers have increased, and this has been partly reflected in pump prices.

Mr Madderson continued "This is contrary to the simplistic view expressed by the AA tha retailers move prices up very quickly to stay ahead of the game. "

Prices previously peaked on 9 September, when unleaded reached 107.03p, but fell back to 104.97p by 11 October, when diesel was 105.96p.

The government increased fuel duty by 2p a litre on 1 September, but some forecourts temporarily froze their prices. According to the petrolprices.com comparison website, the cheapest unleaded in Edinburgh on Sunday or Monday was 102.9p. The cheapest diesel was 103.9p.

In Glasgow, the website showed some Shell and Somerfield branches selling unleaded and diesel at those prices.

The RAC said the latest rises were bad news for drivers, and it warned when VAT was about to be raised. Spokesman Philip Gomm said: "Things are set to get worse in January when VAT goes back up to 17.5 per cent (from 15 per cent].