Motorists could see fuel prices soar to £1.80 a litre by the end of the year, it was warned today.
The bad news came as the cost of a litre of diesel rose in parts of Northern Ireland by nearly 15p in just eight weeks.
This followed a prediction by Goldman Sachs’ energy strategist Argun Murti that — despite a recent downturn in world price — crude oil could soar to $200 a barrel in as little as six months. That means an inevitable knock-on effect at the pumps, according to industry experts, with motorists in some cases being forced to fork out 50p more a litre.
Coupled with spiralling food, fuel and energy costs, the picture for Northern Ireland consumers looks as though it will remain very bleak indeed for the foreseeable future.
Speaking to the Telegraph today, the director of PetrolPrices.com Brendan McLaughlin said that many drivers here will feel the impact of crippling fuel costs.
“By our estimates, if oil was $200 a barrel the average UK unleaded prices would be about £1.65 a litre, and diesel would be about £1.80,” he said.
“That would be a disaster for the UK economy, but particularly for motorists in Northern Ireland where prices tend to be just above the national average.
“We need an immediate emergency tax cut to stem rising prices — at present we are charged duty and VAT, but scrapping VAT would equate to a 20p pet litre cut, and stop the Treasury profiting from rising oil prices.”
New figures provided by the petrol comparison website show the cost of fuel, which varies considerably across Northern Ireland, went up by as much as 14.8p a litre in just eight weeks.
In Hillsborough, where at 11p the petrol hike was among the highest, the cost of a litre of unleaded climbed from 107.9p on April 13 to 118.9p on June 3.
In Belfast, the average petrol price rose more than 9p, from 107.9p a litre to 117.1p, while diesel went up almost 13p, from 117p to 129.8p. In Newry, motorists saw unleaded prices increase by 10.5p, from 109.5p to 120p, as well as a 14.8p rise in diesel, from 118.3p to 133.6p.
All in all, the figures do not bode well for consumers, who recently learned that the days of cheap airfares and bargain holidays could also be over soon.
"Prices are rising at an extremely alarming rate in Northern Ireland – as much as 11p per litre of unleaded and almost 16p per litre on diesel in some areas since mid April,” added Mr McLaughlin.
“If nothing is done and prices continue to rise to predicted levels the UK will be in big trouble by the end of the year."
Last week oil reached a peak of $139 a barrel.
AA head of current affairs Andrew Howard today attributed fluctuating oil prices to market speculators.
“So much of what’s happening depends on whether you are looking at the oil market, or an oil market infiltrated by speculators,” he said. “That’s a commonly held view and it explains a lot of what has happened.
“There should be a four to six weeks lag in terms on an oil price turning itself into a petrol price increase. The fact that this is not happening would suggest that speculators are having an impact. It also means that most of the laws of oil market physics have disappeared.”
Mr Howard said that if oil hits $200 a barrel he would expect an increase of 32.5p per litre of fuel, which is a little lower than other predictions.
But it still means that, based on the AA’s May Fuel Price Report, the cost of petrol and diesel could soar to, on average, an almighty £1.45 and £1.56 respectively at forecourts.