When you look at the oil price in US$ over three years, you wonder why it might be necessary to be raising the fuel price in Britain yet again. Crude oil is $80 when a year and a half ago it was hitting $140.
Then people say that it’s not the oil price which is the problem but the fall in Sterling. The second chart is the price of Sterling in US$ over the same period. If you take April in 2007, the price of oil is Sterling was £37.50p a barrel. In April 2008, it was £62.50p a barrel, topping in June at £70 a barrel, when all petrol prices rose through the roof.
The prices on the forecourt are being lifted back to the same levels as then this week, yet crude oil prices are now only £50 a barrel, 20 to 30% lower than they were in 2008.
One is forced to the conclusion that the petrol price has little to do with the price of crude oil, little to do with the value of sterling, and all to do with the government’s need for cash.