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Petrol Price Rise On Way As 'Floodgates Open'

(c) Sky News 2013

Petrol prices are set to rise by up to four pence a litre in the next few days, retailers have predicted.

The rise was forecast by the Petrol Retailers Association (PRA), and would add around £2 to the cost of filling a typical family car.

It comes as forecourts pass on increased wholesale costs to motorists.

"Independent retailers have been soaking up this increase at the expense of already tight margins because they know how hard the motorist is squeezed," said PRA chairman Brian Madderson.

But he warned: "The floodgates will have to open soon."

The AA forecast a smaller rise of about 2.5 pence per litre, as it accused the industry of failing to pass on falls in wholesale prices as quickly as increases.

The Office of Fair Trading will decide next week whether to launch an investigation into the fuel market.

AA president Edmund King told the Daily Telegraph: "Another new year, another new round of pump price rises after the industry failed to pass on fully wholesale price savings.

"The insight we are now getting on wholesale price movements rams home the need for this information to be out in the public domain immediately."

Throughout the whole of 2012, the average price of a litre of petrol rose by 2.75p.

Despite a fall in fuel demand across northern Europe, and an apparent glut of petrol capacity, wholesale costs have risen steeply in the four weeks since Christmas.

Industry figures show the daily average selling prices in the UK have risen by less than one pence per litre for both petrol and diesel since January 1.

Mr Madderson also said that George Osborne should abandon plans to increase fuel duty from September.

"If fuel costs continue to rise as our sluggish economy and loss of AAA credit rating weaken the pound sterling against the US dollar, the Chancellor must abandon plans to increase duty ... when he presents his Spring Budget.

"Householders and businesses will be hard pressed to cope with market fluctuations let alone more Government tax intervention."

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