As of this moment, the price of US light, sweet crude (oil to you and me!) is $135 per barrel. Last May it was $65 per barrel.
Higher oil prices cause the garages to increase the price of fuel on the forecourt. Tax and VAT are a very large part of each litre of petrol that we purchase. According to http://www.petrolprices.com, in 2007 the price of one litre of unleaded petrol was 95.1 pence, of which 63.7 pence was tax!
It is clear that as the price of petrol increases due to the increasing cost of oil, the additional tax taken by the government makes a big difference to the price we are paying at the pumps.
Even if you do not drive or are ever even a passenger in a car, the increasing cost of petrol and diesel fuel is going to hit you in the pocket.
The cost of air travel will go up. This will increase the cost of many foods and other products that are transported from the rest of the world to the UK. Everything that needs to be transported and delivered will be subject to price increases because of the higher petrol and diesel prices.
Food prices are also affected. The higher fuel prices increase the cost of the production of the food. All the deliveries to the farms and factories start to cost more. The machinery used by the farmers cost more to run. The production lines in the factories cost more to run.
And then you need to allow for the fuel costs to transport the food to the shops and supermarkets. Most of these cost increases are passed on to the consumer!
It looks like almost everyone in the UK will have to pay more if the current high prices for petrol and diesel are in effect for very long,
