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EDITIONS
Thursday, 13 February, 2003, 12:10 GMT
Petrol prices pushed higher
Petrol pump
How high will prices rise?
Petrol prices are rising across the UK as the cost of oil hits levels not seen since the fuel crisis of September 2000.

Major petrol retailers including Esso, BP and Texaco have all increased prices by 1p per litre in the past week, as wholesale oil prices soar in response to fears over supply in the event of a possible war in the Middle East.

The US added to concerns when it warned this week that its crude oil supplies were at their lowest level since 1975.

Analysts say prices could rise further if the current market conditions prevail.

US effect

[There's] a nervousness about what's going to happen

Rob Laughlin, GNI Financial Markets

The so-called "war premium" has been compounded by strikes in Venezuela since Christmas which crippled supply to the US.

Rob Laughlin, an energy broker at GNI Man Financial, told BBC Radio 4's Today programme that the strike had been "very damaging".

Venezuela halted almost all of its exports of both crude and petroleum products to the US markets.

Ray Holloway, from the Petrol Retailers Association, told the programme that Europe was paying the price for US concerns.

"Unfortunately, when they're short, the by-product is in Europe and that pushes up prices here."

Using reserves

Mr Laughlin warned that a protracted war with Iraq could add further pressure, potentially damaging exports from countries in the Middle East.
Petrol pump

In an ironic twist, the shortage of Venezuelan oil has forced the US to increase its supply of Iraqi oil just as a war appears to be imminent.

Mr Laughlin said supplies could be released from the Strategic Petroleum Reserve as happened during the shortage in September 2000.

But he warned that "the nervousness about what's going to happen in the next couple of days" could lead to further oil price rises.

"I think there's a little more follow through to see."

Rising high

Last month, accountancy firm Tenon said crude oil prices could double to as much as $60 per barrel in the event of war, forcing UK petrol retailers to raise the price of unleaded petrol to as much as 90p per litre.

The current price of a litre of unleaded petrol is about 76p per litre.

Tenon said its calculations were based on a "realistic worst case scenario".

The price of crude oil, the main type of oil produced in the North Sea, hit 28-month highs on Thursday following the US's warning over supplies.

 WATCH/LISTEN
 ON THIS STORY
The BBC's Robert Hall
"The next few weeks will determine whether prices will continue to rise"
See also:

13 Feb 03 | Business
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27 Aug 02 | Business
20 Aug 02 | Business
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