£5 gallon looms again as petrol rises 26% in 12 months

Petrol prices are set to soar past 110p a litre - £5 a gallon - in the run-up to Christmas, according to industry experts.

It means that forecourt petrol prices will be at their highest since September last year and signals a 16% rise since the start of 2009.

And drivers will suffer further price rise misery on January 1, 2010 when pump prices rise again as the Government increases VAT back to 17.5% from 15%.

Experts blamed the price rises on speculators, who are stockpiling massive amounts of oil, as well as the falling value of sterling and September's fuel duty increase.

The last time petrol prices were so high the price of a barrel of oil was $100. Now a barrel of oil costs just below $80.

The consumer website petrolprices.com has calculated that the cost of filling up an average family car with unleaded petrol will be £60.50 next month - £12.15 more than a year ago.

An AA spokesman said: "To the average driver, this is madness. Why are prices in an oil glut not falling rather than soaring to level never seen before at this time of year?

"We've got massive surpluses of oil, but it is being stockpiled at near record levels to keep the price up."

With oil companies raising forecourt prices swiftly when the cost of crude oil rises, an RAC spokesman accused them of being slow to react when the price of oil drops.

A spokesman said: "It's about time oil companies became more transparent with their pricing so that motorists can understand why these price rises happen."

The AA says that the average price of a litre of petrol is currently 108.6p with a litre of diesel costing 109.8p. In January the average price of a litre of petrol, according to the AA, was 86.6p with a litre of diesel costing 98.7p. Prices reached their peak last July when a litre of petrol cost 119.5p and a litre of diesel cost 133.1p.

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