Will petrol prices in England go back down to under a pound soon?

G'day MCpapalop,

Thank you for your question.

I doubt it. There are several reasons including emissions trading, the decline in value of the pound and declining production of oil mean that petrol prices will continue to rise over time. Taxes will continue to rise.

Regards

There are three main factors that affect the price of petrol.

First is obviously the price of oil. Long term the price must rise since it is a finite resource. In the meantime there will no doubt be quite wide swings in the price but I cannot see it being lower in, say, fifty or a hundred years time.

The second factor arises because oil is priced in dollars. So, even if the oil price remains static the pound-dollar exchange rate can affect the cost to the oil companies in this country. At the moment sterling is not particularly in favour but we might get out of this mess relatively painlessly which would help.

Finally, we have taxation, namely fuel duty. This has been used for social engineering so is varied according to what the government is trying to achieve. For example, the previous Conservative government decided to discourage the use of petrol by increasing the duty by more than the rate of inflation each year. This was abandoned by the Labour government in about 2000 and they have since kept the increases equal to or below the inflation rate. Will the current coalition decide to reintroduce the "escalator"? I have no idea but I think they ought to.

Personally I would like to see an announcement that the duty will rise in real terms every year in the future. Perhaps with target prices, such as £2 a litre by 2020 and £5 by 2050. That sort of timescale should give everyone enough time to rearrange their lives to reduce their consumption so they are not disadvantaged by the increases.

Petrol prices have fallen 2-3p since the high of 120.9p per litre however going under a pound seems far fetched

Asda has just cut its petrol prices by 2p per litre. Unleaded petrol will now cost a maximum of 115.9p at the supermarket: http://bit.ly/9LxzoO

I think that the only way there is a chance of this happening, is that if the public take the same action of the fuel blockades that happened during August and September of 2000.

i doubt it, the budget will see an increase i reckon, same old things, petrol,cigs,and beer.