Petrol prices could soar by 8% by the beginning of next year, it was predicted today.
And the cost of filling up at the pumps could rise by 3% by this August Bank Holiday weekend (see the Cheap Petrol & Diesel guide).
The warning to motorists came from the Retail Motor Industry Independent Petrol Retailers Association (RMI Petrol).
It put the blame for the expected rises this month on currency movements and world oil price increases.
This increase by the start of 2011 would also take into account the rise in VAT in January from 17.5% to 20%, and the planned hike in fuel duty by 1p in October and 0.76p in January.
Since the start of July, the price of oil has been creeping up from around $75 a barrel, reaching almost $81 by 10am this morning.
RMI Petrol, which represents around two-thirds of Britain's 9,000 petrol forecourts, says unleaded prices could rise as high as 125.9p per litre in the new year, smashing the current record high of 121.61p.
The average litre of unleaded fuel costs 116.7p, while a typical litre of diesel costs 119.2p, according to the website Petrolprices.com.
RMI Petrol chairman Brian Madderson says: "The rebound in crude oil pricing is disappointing but not entirely unexpected. It will further increase pressure on independent retailers who are fighting for survival, especially in rural areas, due to the double hit of falling volumes and tighter margins.
"This crude oil increase will feed through the supply chain and could result in prices going up by as much as 4p a litre in the next three weeks."
He adds: "We also need to remember the coalition Government did not cancel Labour's Budget commitment to raising fuel duty in October and January, with both hikes having VAT added.
"Then we have the coalition's emergency Budget proposal to increase VAT in January, so the outlook remains extremely difficult for motorists and retailers alike. As I forecast earlier this summer, we could be seeing new record pump prices within six months.
"All these trends will add to inflationary pressures in our market and across the economy, threatening higher interest rates in the medium term."
How to slash fuel costs
Joint MoneySavingExpert.com/RAC research has found you could cut fuel bills by up to 60% by following some simple steps.
That equates to a £1,500 a year saving for a household that spends £2,500 a year on petrol or diesel.
Here are our tips for drivers:
- Look for cheap petrol promotions, particularly in supermarkets. The Cheap Petrol & Diesel guide is updated when promotions are announced.
- Use Petrolprices.com to find the cheapest local filling station.
- Accelerate and brake gently.
- Turn off the air conditioning.
- Keep your car aerodynamic by ensuring it is clean and free of its roofrack, unless in use.
- Keep tyres properly inflated.
- De-clutter your car to make it lighter.
Additional reporting by the Press Association.
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