subject: Fuel Prices Set to Rise [print this page] Fuel Prices Set to Rise Fuel Prices Set to Rise
OK so here is an article that I never thought I would have to write, and to be completely honest I am hot happy writing it. It has been muted that petrol prices could potentially rise to over 2 per litre
at the pumps. Now it only feels like a few weeks ago that all of the talk was about prices hitting 1 per litre so you have to question why this is happening.
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Well it seems that nearly everything that happens in the world has the effect of pushing up wholesale oil prices. This in turn pushes up the prices on the forecourts. In recent weeks the political unrest in Middle Eastern countries like Libya has significantly added to the price increases of barrels of oil.
Allan Duncan the Overseas Development minister has indicated that if the political problems do not sort themselves out in the near future the previous oil price of $147 a barrel could be surpassed. As the majority of the world's oil is based around the middle east it is feared that terrorists could try to capitalize on the problems faced in the region and start to target tankers and reserves.
If terrorist organisations start to target oil supply chains the cost per barrel could rise to nearly $250 a barrel which would push pump prices to 2 a litre. This obviously is not good news for motorists especially as prices have already risen to way above the 1 mark hit in 2008. Many people are already cutting the use of their motor vehicles as they cannot afford to fill their tanks. If the prices continue to rise this practice will become much more widespread.
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Mr Duncan told The Times "I've been saying in Government for two months that if this does go wrong 1.30 at the pumps could look like a luxury". This is also extremely worrying news for UK businesses. Hauliers have already seen their fuel costs rise dramatically cutting their profit margins on a huge scale. Further fuel cost rises will further pressure these margins, as many businesses will be providing fixed term fixed price contracts a rise in fuel could see many firms going to the wall.
This warning from Mr Duncan could hit the UK much quicker than first expected. As the political unrest in Libya has not followed the same path as unrest in Egypt we are all entering a period of uncertainty. As troops loyal to Colonel Gaddafi are now standing their ground the battles are moving closer to the Oil terminal near Tripoli.
If this battle does start to affect the oil terminals we could see nations like the UK and the USA be forced into military action to protect the supply lines. This will obviously not be a situation that the UK would want to find itself in but a sharp rise in oil prices could significantly risk the worlds economic recovery.
We will watch this story closely and will report any significant changes. It might be worth finding a cheap price on the forecourt and fill your tanks full as prices could rise quickly if this situation takes a turn for the worse.
