Wednesday, December 29, 2010

Fuel costs 'on the rise' in Britain

Source: Press TV

The British consumers will have to pay higher costs for fuel in 2011 as world markets prices of crude oil increase to their highest level in more than two years.

The rise in the price of crude oil is partly linked to a recent meeting of the Organization of the Petroleum Exporting Countries (OPEC) in which the members decided to keep the quotas unchanged until June, the daily Belfast Telegraph reported.

“Even without any increase driven by world markets, UK motorists face a 0.76 percent rise in fuel duty - upon which they also pay VAT - on January 1”, said an AA spokesman.

“Three days later, petrol prices will rise higher when the actual rate of VAT goes up from 17.5 percent to 20 percent”, added the spokesman.

Oil prices are up by almost 30 percent since September, pushing up both pump prices and wholesale gas costs.

This development comes after the prices hit a low of around $40 a barrel at the end of 2008.

The worry among economists is that higher oil prices -- which hit both the fuel industry and the household gas and electricity sectors -- will further drive up inflation and hamper the global economic recovery.

According to the AA, the cost of unleaded petrol is now at a new record high of 123.26 pence per liter -- up 14 percent on a year ago.

Soaring petrol prices come at a bad time for UK consumers, who are battling inflation of 3.3 per- cent.

Three weeks ago, Npower became the latest of the "big six" energy providers to increase its prices - taking electricity and gas tariffs up by an average of 5 percent in the new year - following similar increases from British Gas, ScottishPower, and Scottish and Southern Energy in recent weeks.

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