Families who are already struggling to keep their cars on the road have been warned to brace themselves against the expected price hike in unleaded petrol. Over the next few years, the price is expected to rise from todays average price of £1.34 per litre to an unprecedented £1.54. This will mean that for those who have cars similar to the Ford Mondeo with a 70 litre tank, the price of filling it will rise from around £93 to almost £108.
Despite the current brief respite, fuel costs are set to rise again within the next couple of months amid an increasing surge for demand from Asian economies which are booming. Forecasters at the Ernst and Young ITEM club predict that this will trigger another boom in the worlds oil markets.
Despite this, petrol and oil prices are expected to drop slightly soon, as the disruptions in the supply chain caused by the Libyan conflict and Hurricane Irene start to diminish. The steep rise expected in petrol and energy prices will further intensify the squeeze on household finances at a time when the average pay rise is well below the level of inflation.
Neil Blake is a senior economic advisor from the ITEM club, and he says that by 2013, the prices consumers are paying at the pumps will once again be taking a large chunk of the household’s finances. He added that the high demand from emerging markets were maintaining the pressure on inflation, and would further increase the fuel duty we pay on the home front.
The Chancellor George Osborne is expected to announce in January a deferred annual price increase in petrol of 3p a litre, and a further rise is likely next August.
