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UK petrol price hits five-month high

In a rather bizarre scenario we have seen UK petrol prices increasing towards the one pound level despite the fact that oil prices across the world have remained fairly steady for some time. There are a number of factors which appear to have come into play which include the recent two pence a litre tax increase by the UK government and the fact that some oil companies around the world are refusing to sell at current levels.

Indeed there were reports earlier this month that ten oil tankers, laden with millions of gallons of petrol, were anchored off the south coast awaiting a rise in the worldwide oil price. The problem now is that with some supplies refusing to sell oil at current levels this is causing more and more competition for less and less supply which will have the crazy effect of pushing prices higher. The rush to buy oil will see some of these "non-suppliers" coming back into the market and fulfilling demand at higher oil prices.

The problem for the UK government is the fact that they are unable to in any way force oil supplies to sell their oil at lower prices. As the price of petrol creeps higher, towards the one pound level, this will put more and more pressure on the UK government to announce a U-turn and a reduction in UK petrol tax.

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