A large part of the problem is in crude trading, which is a dollar donominated product. The pound's weak relationship to the dollar, driven by some recovery in the US economy, a still failing British one and a hung parliament (never installs confidence in the market place) is a major factor in the disparity.
Even though crude is trading at almost half its high of almost $150 a barrel (when petrol was £1.20 a litre), we got 2 dollars to the pound at that point meaning a barrel in sterling was about £70.
The pound / dollar relationship is now about 1.5, meaning a barrel in sterling is approx £55. Thats only a 20% difference in sterling barrel price compared to almost a 50% difference in the crude price.
Compound that with the fact that the govt added to fuel duty in the last budget for the 4th time in a row and you get further away from historical correlations..
Add to that the BP fiasco and companys like Shell saying they'll close petrol stations, cut staff and save a billion a year by reducing refining capacity and the basic economics of supply and demand will drive the price all by itself.
Our NPS analysts reckon we could see £1.50 sometime this year as the impacts of the above roll through.
Yes the crude price is a factor, but its only one of a few.
I'll get me coat.........
Calendar
.some one some where is taking the piss remember the time when it hit $120 a barrel and it was cheaper a litre then than it is now..think it may have peaked at $140 a barrell 2 years ago.....
