Motorists face £4 gallon ($7)

The surge in the oil price – caused by fears of a global shortage – raises the spectre of the £4 gallon at the pumps by the time of the General Election, experts said.
The rises were sparked by reports that America’s oil reserves are far less than expected – raising fear of shortages that will drive up the price even further as the main American summer driving season approaches.

Huge demand from industrially-booming China is adding to pressure on prices. Ray Holloway, of the Petrol Retailers’ Association, said: ‘I think we are looking at a minimum of 5p a litre – or nearly 25p a gallon – at the pumps by the time of the election.

‘But if the doom-mongers are right and there are other crises which drive up the price of crude even more, we could be looking at 10p a litre or around 45p a gallon. That is not unreasonable. It’s the Doomsday scenario.’

He added: ‘There is good reason to believe we will have a General Election where the oil price hikes are pushing through to higher prices at the pumps. The Americans will panic that they won’t have enough petrol and start buying heavily on international markets. That will push up the price even more.’

Full story at This Is Money