-2/01/2008

Drivers face pump price rise as oil production is cut

Motorists have been warned to expect the price of petrol and diesel to rise by up to 5p a litre after members of Opec, the oil producers’ cartel, agreed to cut daily production by 5%.

The production cut from November 1 is in an attempt to boost the price of oil, which has dropped from a July high of $147 a barrel to around $65 a barrel. A production cut is predicted to add about $10 to the price of oil.

However, immediately after the production cut was announced the price of oil fell by around $4 a barrel. And, there was further good news for drivers as supermarket groups Asda, Sainsbury’s and Tesco slashed the price of a litre of unleaded petrol once again, this time to 94.9p, with diesel falling to around 107.9p a litre

A $2 increase in the price of oil adds about 1p a litre to the price of fuel - currently an average 100.9p for a litre of unleaded petrol and 112.8p for a litre of diesel, according to the AA. That means around 5p could be added to the current price of fuel before Christmas as it takes around six weeks for oil price rises to feed through to the pumps.

(BBC/Daily Telegraph)
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