The Petrol Retailers’ Association has warned that the civil unrest in Syria and Egypt, the reduction by one third in Libya’s oil exports and the demand for oil slowly returning to some Asian markets have all had an impact on crude oil prices. The cost of Brent pushed through the critical $110/barrel level last week, which equates to a 10% increase since the end of June.

Meanwhile Goldman Sachs Group has predicted that Brent crude prices may rise to $115 a barrel in the ‘very near term’.

Brian Madderson, chairman of the PRA, commented: ‘UK petrol prices have not yet seen the full impact of this crude oil increase due to the rapid and slightly unexpected revaluation of pound sterling from $1.48 to $1.56. Therefore it was concerning to read recent comments from the City that the “pound is overblown” and will soon come hurtling down towards the $1.45 level.

‘We calculate at current wholesale prices that this will add a further 5 pence per litre at the pump before the end of September and hit businesses and households in the pocket at a time when pundits are forecasting a continued increase in retail sales to drive growth in the economy. Should the Middle East tensions escalate further and crude oil prices react accordingly, the Bank of England’s new inflation targets could be significantly challenged.’

In response, Madderson continued the PRA’s call for the EU to look into alleged oil price fixing.

‘The sooner the EU Competition investigation into allegations of oil price fixing is completed, the more certain we can be that our retail fuel prices are only being influenced by macro-economic and political factors and not anti-competitive actions of the oil companies,’ he concluded.

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