PETROL prices have risen to their highest level to date in the wake of world oil prices touching $60 a barrel.
The AA Motoring Trust, which monitors pump prices daily, said that unleaded petrolrose to an average of 86.39 pence a litre on Thursday, and that prices were likely to increase further.
Diesel rose to 90.52 pence, also a record, on a day when oil prices hit $60 for the first time since Nymex crude trading began in 1983.
Yesterday New York light sweet crude oil futures for August delivery, the current benchmark, reached $60 again, amid fears of a “supply crunch” at the end of the year. Hedge funds and speculators were betting on US demand for winter fuel straining oil supplies in the fourth quarter, traders said.
Ruth Bridger, of the AA Motoring Trust, said that petrol prices had risen by nearly 2p since the start of the month as a direct result of the rise in oil costs. “If it carries on like this, within the next two or three weeks it will be at £4 a gallon,” she said.
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Ray Holloway of the Petrol Retailers’ Association, said that such a rise was unlikely. He forecast that unleaded was likely to rise by about a penny by the end of July before falling back in August. That would leave the cost of petrol below the psychologically significant barrier of £4 a gallon, equivalent to nearly 88p a litre, throughout the summer.
But he added: “The situation with diesel is wholly different, because the simple truth is we are just not capable of producing enough diesel. That price is going to remain strong through the winter.”
Although the petrol price is the highest ever recorded in nominal terms, it remains below its peak five years ago when adjusted for inflation.
Steven Brooks, an analyst at Wood Mackenzie, the energy consultancy, said that petrol retailers’ margins had been “amongst the lowest we have seen” in recent weeks, meaning that they may have to increase prices at the pump if the oil price does not ease.
Mr Brooks said: “Despite Opec making noises that they intend to increase production, there doesn’t seem to be any downturn, and prices are still very high.”
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On Monday, Sheikh Ahmad al-Fahd al-Sabah, the president of Opec, said that he would hold talks with the oil cartel’s ministers on increasing output by 500,000 barrels per day, although an increase is not expected before August.
Purnomo Yusgiantoro, the Oil Minister of Indonesia, an Opec member, said: “Oil demand will increase when facing summer and winter . . . We are worrying that the tendency is that [prices] will increase.”
AA figures show that Britain’s motorists are now paying £4.8 million a day more on petrol than at the start of the year.