Oil rises 'could fuel petrol price hike'
Reports say petrol prices could rise
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Friday, 21, Sep 2007 09:43
Motorists are being warned that petrol prices could rise after the cost of oil jumped further, on fears that a tropical storm could hit the Gulf of Mexico.
Reports suggest that petrol prices could soon reach a pound a litre, with drivers already facing the prospect of a fuel duty increase next month.
Oil prices remained near $82 (£41) a barrel in early trading today, after hitting a record $84.10 (£42) yesterday.
US crude for November delivery stood at $81.65 a barrel, while the price of London Brent crude was at $78.87.
Oil has traded above the key $80 (£40) mark all week, despite oil producer cartel Opec having pledged to boost output by 500,000 barrels a day from November in a bid to calm fears about supplies.
Energy firms have shut over 360,100 barrels per day (bpd) of output in the Gulf of Mexico, more than a quarter of the region's crude production. Some 16.7 per cent of natural gas production has also been shut down after a tropical depression blew into the area.
Fears that a possible storm could hamper oil production come after US crude stocks fell for a fourth week running, dropping by a higher-than-expected 3.8 million barrels last week. As such US oil stocks are down four per cent on the same time last year.
The possibility of a subsequent possible rise in petrol prices will come as bad news for motorists, who are already facing a 2p fuel duty surcharge.
Drivers will have to pay the increased fuel duty from October 1st, but petrol retailers have pressed the government to postpone the rise in light of climbing oil prices.
Earlier this week the RMI Petrol Retailers Association (PRA) warned that motorists and petrol retailers could be placed under "undue financial strain" by the increase.