Forecourt chiefs warn of fuel price rises

Soaring oil prices are poised to force the cost of petrol 2p higher, forecourt owners have warned.

And tax rises forecast for this month's Budget could see motorists paying still more for fuel, the Petrol Retailers' Association (PRA) said.

You have to say the chances of petrol prices going up are quite real

Kamal Sharma, Commerzbank

Speculation has risen that Chancellor Gordon Brown could in the Budget raise duty on petrol by more than the rate of inflation, to raise funds for increases in government spending.

But many observers have said that, with oil prices at a six-month high, Mr Brown may prefer to look elsewhere for tax revenue rather than risk sparking rebellion among motorists.

"He has said previously that he would not raise duty by more than inflation when oil prices were high," AA motoring policy manager Bert Morris told BBC News Online.

Where motorists' money goes

Wholesale price of 1 litre of unleaded petrol: 16.5p

Duty: 45.8p

VAT: 10.9p

Total: 73.2p

Source: AA

"And people nowadays are very sensitive to petrol price rises."

"They know how much it costs to fill up their car. If the price goes up our phones ring, letters arrive."

Protests in the 2000 over UK fuel taxes, which are among the highest in Europe, proved a major test for the government.

The forecourt price of a litre of unleaded petrol includes almost 46p in fuel duty, with the Treasury taking VAT on top.

Supply fears

The price of benchmark Brent crude oil on Wednesday rose back to $27.26 a barrel, within $0.50 of the six-month high reached on Tuesday.

What motorists abroad pay

Norway: 75.5p

Denmark: 71.1p

Italy: 64.0p

Germany: 64.0p

France: 59.0p

Ireland: 49.9p

Greece: 43.7p

US: 24.4p

Data: Pence equivalent per litre of unleaded petrol Source: AA

The PRA said that the rise in oil prices, sparked by escalating unrest in the Middle East, threatened to force petrol prices higher by mid-May.

"We are in a position where the situation in the Middle East is so volatile, and no-one knows if it will worsen or improve," PRA spokesman Ray Holloway said.

Average petrol prices have already risen by about 4p per litre this year, with premium unleaded petrol up from 68.9p to 72.9p.

Oil giants BP and Shell said they had no immediate plans to raise forecourt prices.

But Commerzbank analyst Kamal Sharma said: "You have to say the chances of petrol prices going up are quite real."