[Pound]4.50 a Gallon ; Home Heating Oil to Rise in Price As Well

PETROL prices in Northern Ireland were soaring towards the [Pound]1 a litre mark today, with motorists braced for further rises of up to 4p a litre next week.As the cost of oil continues to rise, industry experts say that the cost of a litre of petrol may hit 97p ([Pound]4.41 per gallon) within days and possibly as much as [Pound]1 by next month. And if the oil sector remains in this precarious condition, homes could be facing both record petrol prices and record heating bills this winter.According to experts, homeowners are paying [Pound]340 to [Pound]350 for 900 litres of oil, up from around [Pound]200 for the same amount this time last year.Oil has become increasingly expensive due to security concerns in the Middle East and the high demand that has been exacerbated recently by refinery problems in the United States. Then Hurricane Katrina hit, driving prices higher still with oil standing at $$67 dollars per barrel.Petrol prices in Northern Ireland are already among the highest in the UK, ranging from around 90p a litre to almost 95p or even more.Noel Smyth, regional manager of the Petrol Retailers Association (PRA) in Ireland, has predicted an unprecedented rise in petrol prices over the coming months.”The cost of oil depends a lot on what is going on in America. The USA has lost 10% of its refining capacity and has had to buy petrol and diesel from Rotterdam,” he said.”That is set to continue, and if it does, British suppliers will be hit and petrol prices could well reach [Pound]1 per litre by next month.”David Blevings of the Northern Ireland Oil Federation said the rising cost of crude oil had put pressure on all sources of energy.”After a period of relatively ‘cheap’ energy prices the short to medium term for all energy sources appears high,” he said.Ray Holloway, director of PRA UK, confirmed the cost price of petrol has risen sharply this week as a result of Katrina, but urged people not to panic.”We are likely to see the results of that appear on the UK’s forecourts next week as prices rise by between two and four pence per litre. But we need to put things into perspective,” he said.”I don’t see the current situation lasting. Next week will be uncomfortable, but then things will recover.”However, he added: “But the days of petrol costing 75/ 80p per litre are over. Without a change in government taxation, we will be paying [Pound]1 per litre at some point in the future.” Mr Holloway also said there would probably be a hike in the price of diesel.”We do have a problem in that part of the oil used to produce diesel needs to be used to produce heating oil. And we have a shortage of diesel. I expect the price per litre of diesel to rise to [Pound]1 before Christmas. So if we have a cold winter, we’re in trouble.” The UK’s top banker Mervyn King, Governor of the Bank of England, has also said high oil prices are likely to remain for some time. “It will take a long time for new sources of oil to be developed, which would then bring down the price significantly,” he said.Meanwhile, DUP Assembly member Ian Paisley Jnr has called on the Government to reduce tax on fuels.