Petrol price breaks 90p-a-litre barrier

Published on Tuesday 9 August 2005 00:15

PETROL prices have risen to record levels, with the average cost of fuel in Britain passing 90p a litre for the first time.

A spokesman for the AA Motoring Trust said UK motorists were now spending an extra 7.5 million a day on fuel, compared with January.

He said: "Everybody hopes that when the price of crude oil comes down, petrol retailers will bring their prices down as quickly."

The price rise, taking petrol to about 4.10 a gallon, come as oil prices hit new record levels. A barrel of light crude for September delivery rose towards $64, amid jitters over the US government shutting its embassy in Saudi Arabia because of security concerns.

It also comes less than a week after the death of King Fahd of Saudi Arabia rocked the markets and led to speculation of a change in oil policy in the desert kingdom.

Threats in Saudi Arabia are particularly troubling to traders, because the country is the world's biggest oil producer.

With other nations pumping oil at close to capacity to meet spiralling demand in emerging economies such as China, a severe disruption to Saudi supplies would be damaging.

Earlier this year, motoring organisations confirmed that the price of unleaded petrol had broken through the 1-a-litre barrier on some Scottish islands and cost more than 90p a litre in many parts of the mainland. The AA Motoring Trust said the cost of running a petrol car had risen by 6 per cent since last year, with diesel cars 5.3 per cent higher.

It said that an average car-owning family spends more on motoring than on housing, food and leisure. The average price of unleaded fuel hit 88.1p a litre in July, compared with 85.5 in mid-June and 79.6p in January.

It means drivers are now paying an average of about 100 a month for petrol, compared with 87.43 at the beginning of the year.

But drivers in central Scotland often benefit from lower-than-average prices because of the proximity of the Grangemouth oil refinery.

And environmental groups argue that the overall cost of motoring has fallen, while bus and train fares have risen ahead of inflation. Transport 2000 says motoring costs were 11 per cent lower than 30 years ago, while fares had climbed by 68 per cent.