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US Disaster Sparks Surge in Petrol Prices

Posted on: Tuesday, 6 September 2005, 06:00 CDT

Motorists were yesterday facing fresh increases in the cost of petrol, but retailers said pump prices were unlikely to break through the pounds 1-a-litre mark this year.

The destructive path blazed by Hurricane Katrina in the United States forced up the wholesale price of petrol by 8p a litre last week and led to drivers being charged more for refuelling their cars at filling stations.

Shell was among the retailers to increase the price of a litre of unleaded petrol last week to an average of 94.5p at its 900 forecourts in the UK.

With pounds 1 a litre looming as the norm in the UK, it has sparked fears that pumps will not be able to display figures higher than 99.99p a litre.

This could mean oil giants including Shell and rival BP having to spend millions of pounds upgrading the software that services the pumps. Ray Holloway, of the Petrol Retailers Association, said a fresh increase in pump prices was certain as a reaction to the effects of Hurricane Katrina.

But he added, 'I don't think pounds 1 a litre is on the horizon in the short term or even this year. Once Labor Day is out of the way in America this weekend then people will return to work and we should see a fall in (global) demand.'

Local competition has helped to restrain the rise in petrol prices, although some filling stations in remote parts of the UK are already charging pounds 1 for a litre of unleaded petrol.

Source: Western Mail

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