UK: Petrol prices are set to break the #3.50 [$5.25] barrier

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From tomorrow's Electronic Telegraph:

http://www.telegraph.co.uk:80/et?ac=000154642417163&rtmo=aTC5BCXJ&atmo=FFFFFFtX&pg=/et/00/2/17/nper17.html

ISSUE 1728 Thursday 17 February 2000

Petrol prices are set to break the #3.50 [$5.25] barrier By Paul Marston, Transport Correspondent

PETROL prices are likely to surge through #3.50 a gallon [$5.25 per Imperial gallon, which is two US pints more than a US gallon] next month because of rising taxation and the soaring cost of oil on world markets.

Despite ending the automatic fuel duty escalator, Gordon Brown, the Chancellor, is expected to increase the Government's levy on petrol by substantially more than inflation in his March Budget to meet the investment demands of transport ministers. Mr Brown has said that the revenue from any real terms rise will flow into a new fund for financing transport improvements.

Officials of the Department of Environment, Transport and the Regions expect a tax increase of two or three per cent above the retail price index. This would push pump prices up about 13p a gallon (three pence a litre), making a gallon of unleaded #3.59 (79p a litre), or 32 per cent more than when Labour took office in May 1997.

Many in the oil business believe the actual rate will be higher because of further rises of 10p or 12p a gallon over the next four weeks as crude prices continue to edge upward. Prices are currently about $28 a barrel, having almost tripled in the past year since the Arab oil cartel Opec cut production. With oil priced in dollars, the situation has been aggravated in Britain by sterling's recent slip against the US currency.

Ray Holloway, of the Petrol Retailers' Association, said the oil producers increased prices to his members by about 4.5p a gallon (1p a litre) yesterday, and two or three similar rises were expected before OPEC meets at the end of March to consider whether to relax controls on output.

Though Labour increased petrol tax by six per cent more than inflation in its first three Budgets, the impact on Britain's 29 million motorists was relatively small until a few months ago because the rises were largely offset by weak oil prices. Figures from the AA show that the price of petrol last month was already the most expensive in the European Union.

Britons were paying an average of 75.3p per litre, compared with 65.5p in France, 62p in Germany, 63.3p in Italy, 52.7p in Ireland, 46.5p in Spain. The USA price was 21.1p. In remote parts of Scotland, prices were 23p a gallon above the UK average.

-- Old Git (anon@spamproblems.com), February 16, 2000

Answers

Well U.K. we (the U.S.) has millions of barrels of oil we'll give to you for free. Its in the form of used tires just come pick it up. We might even pay you to do that too.

-- Guy Daley (guydaley@bwn.net), February 17, 2000.

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