Oil prices in 2011
It looks as though petrol prices (already at a record high, according to analysts Experian Catalist) will rise even further next year. Petrol currently averages 121.76p for a litre of unleaded and diesel is not far off record levels, at 125.73p. This price has been influenced by the severe weather, but any fall will be temporary, as the VAT increase in January and a further increase in fuel duty could add a further 3.5p a litre. If the International Energy Association is right and a continuing global recovery raises demand for oil while OPEC insists there is no need to increase production the price could rise even higher in 2011. If that happens then inflation could reach levels where the Bank might feel forced to put up inteerest rates.