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Motorists are facing record rises in petrol and diesel prices in the run-up to Christmas.
Soaring oil prices sent diesel to a year-high of 108.05p and the AA today said the cost of petrol could also rise despite a price war between supermarket fillings stations.
The warning came on the day that oil giant BP reported profits of more than £1 billion a month -surpluses in July, August and September came in at £3.05billion, a 60 per cent rise on the £1.9 billion profits it made in the second quarter of the year.
In 2008, the most extraordinary year in the history of the oil industry, BP made a best-ever £26 billion in profit when the price of crude hit an all-time high of $147 a barrel.
If the price of crude continues to rise as it has in recent weeks to top $80 a barrel again, Britain could see its highest ever fuel prices just as drivers plan Christmas visits to family and friends.
Just a ha'penny off its 2009 high, the average price of a litre of petrol is today at 106.85p. The AA said the price would be higher but for the cut-throat price war between supermarket filling stations.
"Diesel has hit its highest point for the year," said an AA spokesman. "With the recent rises in fuel duty and the recession, that is putting a lot of pressure on families who will have to cut costs elsewhere if they are to continue to run the family car.
"The price of oil is being pushed up by speculators again as international money gets switched from currencies into commodities like oil."
Of the rise in diesel and petrol, 7p of that - 2p of which came in September - is increased fuel duty. Profits at the oil companies had been depressed earlier in the year after the price of crude slipped to below $40.
However, with Shell and other major oil companies due to report profits later in the week, the City believes money is surging back into the coffers of Big Oil.
"Based on our analysis it looks like the third quarter could mark the turning point for the sector," said Lucy Haskins, an oils analyst at Barclays Capital.
Reader views (13)
People, the UK has signed up to reducing carbon emissions so cutting fuel duty is about the most bizarre thing to do as making fossil fuel cheaper will mean we burn more - duh! Also, when the world economy turns around China and India will carry on taking larger and larger shares of this finite resource and the forces of supply and deamnd will mean that fuel prices will rocket, and little Britain won't be able to outbid them. Better to start making small steps to reducing your car dependency now so you are prepared for life without personal motorised transport. I would suggest car sharing to/from work as the easiest step to start with. I have been car sharing since 1997 and have saved a fortune, and am protected from the full effects of fuel price increases as a consequence.
- Pete, Chippenham, England
And nobody has mentioned that small matter of January 2010 VAT increase.
- Mrc, Darlington UK
If Gormless Clown wasn't so addicted to the £50bn a year that fuel duty gives to prop up his discredited finances, we would have fuel at a much cheaper price. Don't blame the oil companies - they supply a product that most of us need for about 20% of the cost of a litre of unleaded.
- Nobby Clark, Perth, the Scottish one
Gordon Brown went of to OPEC to plea for cheaper petrol for Uk motorists but has since increased the fuel duty three times. Seems a bit hypocritical!
As for supermarkets battling it out. Tesco's price varies according to the local competition with the rural areas with poor public transport payong the highest price.
- George, Cambridge UK
Does every other country in the world keep putting up their fuel prices or is it just the UK ?
- Grim Reaper, Hell
James London - "The amount of CO2 that cyclists breath out do far more harm to the planet than most motorcycles and electric cars." This statement is false. Please research first before writing anti-cyclist comments.
While people do exhale carbon dioxide (the rate is approximately 1 kg per day, and it depends strongly on the person's activity level), this carbon dioxide includes carbon that was originally taken out of the carbon dioxide in the air by plants through photosynthesis - whether you eat the plants directly or animals that eat the plants. Thus, there is a closed loop, with no net addition to the atmosphere.
The reason why burning fossil fuels is a concern is because it is not a closed loop over human time scales. Extracting coal and oil and burning them puts carbon back into the atmosphere that plants removed millions of years ago.
An electric car is far from pollution free and in some cases can even leave behind a rather massive carbon footprint. Keep in mind that all of that electricity being stored up for the drive has to come from somewhere and that place is from the power plants of which a large percentage run on fossil fuels in one way shape or form.
- Dom, london
If millionaire Labour supporter Lakshmi Mittal has got millions to spare, let it be spent on proper transport investment, not another unwanted statue.
The Kengestion charge in West London hurts poorer people disproportionately. Not just those that need to travel, those whose tradesmen have to pass on the surcharge to their bills.
Melvyn might be interested to know that one Mercedes-driver in the extended zone actually welcomed the Kengestion charge, as it would clear the 'little people' off the roads and he could just claim it as a business expense. Nice chaps, these champagne socialists.
- Jools, London
It is time the oil companies were reigned in. It is disgraceful to have essential things like oil prices so high when the companies are reporting such huge profits. Time to ban shareholding in these companies or better still nationalise them. What will happen when all transport grinds to a halt !
- Thomas Hayes, Leeds UK
If demand exceeds supply prices rise and fact is oil is on its way out so byb bye lazy motorists who use a car to cross the road.
Well you could get on a bus oh just remembered Bumbling Boris is jacking up fares by record amounts so his public school cronies dont pay a C-Charge in West London.
Ah well there is always shanksies pony - that is not taxed - yet!!!
- Melvyn Windebank, Canvey Island, Essex
Yes, all thanks to that wreckless,greedy,incompetent maniac Gutless Brown who seems hell bent on destroying any hopes of a recovery in the UK.
Gordon Brown : "We are taking the necessary actions in this recession" - What, like massively hiking fuel duty even though petrol prices have come down?!
We thought we might have been able to cope seeing as the oil price has dropped over 60% but oh no, Brown comes along and has hiked fuel duty 3 TIMES!!! (yes 3 times!) in the past year adding another 6p to every litre of petrol - MADNESS!
So now 73p in each litre of petrol is TAX.....this is sickening and is as we speak, draining us of our hard-earned money.
Thanks for nothing Brown you devious,deluded economy-destroying maniac.
- Anon Pc, London Compound,Londongrad,EUSSR
This is just scare-mongering. The competition between the supermarkets will keep petrol puices down
- Keith Price, Luton England
Remember too that there will be big rises in petrol and deisel this April 2010 due to the governments extra tax take in the 'fuel escalator'. Prices will reach £1.16 a litre, and that's without any increase in crude oil prices. So much for deflation.
- Paul B, London
Of course this will hit the economy. If the government was serious about reviving the economy it would reduce the tax on fuel and VAT on the tax on fuel.
Whilst the bike riding ego warriors will no doubt cheer this additional cost will increase the cost of delivery of their repulsive lycra suits, not to mention increasing the fuel cost to Ambulance Fire Police and other emergency vehicles, but no doubt the lycra suited cyclist would prefer that they carry there equipment on cycles. As would delivery of their precious tyres.
Fuel increases are the very worst thing for the economy, it affects everything all of the goods that you buy, the cost of services, housing, transport, food. I do not want to see any ego warrior in this column say how good it is for carbon footprints. The amount of CO2 that cyclists breath out do far more harm to the planet than most motorcycles and electric cars.
- James, City of London
