Daily Telegraph: Price of petrol 'to fall' as US goes back to work: A spokesman for Shell said: "We have started bringing down prices in some areas as a reaction to a fall in the cost of the product." (ShellNews.net)
By Malcolm Moore, Economics Correspondent
(Filed: 02/09/2004)
The price of petrol will fall this month even if oil prices continues to rise, market analysts predicted yesterday.
The reason, they said, was that American drivers were returning to work from their holidays and the huge impact they have on world supplies would lessen.
Ray Holloway, the director of the Petrol Retailers Association, said: "You will see a fall in the fuel price.
"Even if there is a recovery in the oil price there will still be price reductions across the forecourts.
"The average price of petrol is 82p across the country. It could go down to 79p to 80p."
For the past two months the price of a litre of unleaded petrol in Britain has been kept high because of demand from the US, where drivers have been buying up fuel for the holiday season.
"There are refinery problems in America," said Mr Holloway.
"They cannot build new ones because of the environmental lobbyists. So when they run short on petrol, which they do every summer, they buy petrol from Europe, which pushes up prices."
The UK's petrol price is determined by the wholesale price in Rotterdam.
America's forecourt prices have fallen almost every day since last week, after running at record levels for much of the summer. Figures from the US Energy department yesterday showed that petrol stocks rose 2.2 million barrels to 210.6 million.
But the price of crude oil shot up yesterday because US stocks had fallen sharply. During afternoon trading, the price of a barrel of Brent crude rose $1.45 to $41.06.
The AA yesterday denied claiming that petrol prices could rise sharply. It had been reported as saying that prices could hit 88p a litre due to high oil prices.
A spokesman said yesterday: "We genuinely do not have an idea on where petrol prices will go".
Penny Jamieson, at BP, said that prices were coming down "gradually" across its chain of forecourts.
"There is a feeling that they are coming down," she said.
A spokesman for Shell said: "We have started bringing down prices in some areas as a reaction to a fall in the cost of the product."
Asda said its price was still 79.9p a litre, while Tesco said it would match Asda's prices.
A survey from the RAC said that recent petrol rises had added up to £102 a year on to the cost of running a car.
Even a fuel-efficient car costs £53 more a year to fuel, the RAC said, and the cost of running a new car is equivalent to a quarter of the income of the average household.
Gordon Brown, the Chancellor, has postponed the new rise in fuel duty, which was scheduled for yesterday.
Analysts now believe that thanks to the extra windfall he is reaping from tax on North Sea oil, he will delay any rise in fuel duty until the next Budget.
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