In July 2007 the first 3 digit petrol prices appeared, but there appears to be little appetite for them to return to that level now oil prices are easing. With Middle Eastern oligarchs so wealthy that they spend their petty cash on Premier League football teams, is there any hope for lower fuel prices?
A barrel of oil comes in at just under 96 U.S. Dollars currently. The last time it was at these levels, pump prices were around £1 a litre. They currently average around £1.14 per litre. With fuel duty increases suspended by Alistair Darling until 2010, where does the extra 14p come from?
One only has to look at the profits of the large oil companies to see.
In the first 3 months of 2008, Shell made profits of $7.8bn (£3.9bn), up from $6.9bn a year ago. BP saw its profits rise 48% to $6.588bn (£3.31bn), from $4.4bn. In January, Anglo-Dutch firm Shell reported annual profits of $27.56bn (£13.9bn) for 2007, a record for a UK-listed company.
In July of 2008, Shell half-year profits were nearly £8 bn- yes eight billion! Shell even had the audacity to describe trading conditions as ‘tough’. BP made £6.7 bn in the same period.
Consumers are being forced to economise by driving more carefully, and by buying more economical cars.
In the long term however, the control of oil by Russia and the Middle Eastern countries is bad news for UK consumers, as they will dictate the price of the fuel we put in our cars.
So unfortunately the three digit petrol prices are here to stay.