The soaring cost of a tank of fuel will continue to spiral with petrol set to hit nearly £1.50p a litre by the end of the year, a motoring group has warned.
As crude oil prices soar further beyond this month's repeated record highs, pump prices could go up another 20p over the next few months, figures released by the Institute of Advanced Motorists (IAM) Trust said.
With crude oil prices more than double where they were in July 2007 the price of diesel (currently around 132p a litre) will go even higher, the IAM predicted.
The trust's technical policy head Tim Shallcross said: "If crude oil prices stay at their current level, or rise even higher, Britain's motorists can expect another 20p rise in the price of a litre before the end of 2008, bringing closer the prospect of the 150p litre."
The IAM Trust's research showed:
:: At the start of July 2007, unleaded petrol was 97p a litre and diesel was 97.4p. Crude oil was just over $71 a barrel
:: Today, crude oil is trading at around $146 a barrel, more than double the 2007 price
:: Although pump prices have risen steeply, at today's prices of 119.37p a litre for petrol and 132.78p for diesel, the percentage increase is much less than it has been for crude oil
:: Tax on fuel is split between VAT and a fixed amount of duty, so a comparison of the pre-tax prices is needed to show how much the basic price of the fuel has gone up over the past year and whether we have seen the real impact of the record high crude oil prices.
:: The pre-tax price of a litre of petrol in July 2007 was 34.2p and for diesel it was 34.5p. If these had doubled in 2008 to match crude oil prices, the pre-tax price would be 68.4p for a litre of petrol and 69p for diesel.
:: Applying today's higher duty of 50.35p, and adding VAT, gives a pump price of 139.53p for petrol and 140.24p for diesel. If crude oil prices stabilise at today's levels, or rise even higher, pump prices will inevitably catch up.