Fuel price hike expected

• £5 gallon by Christmas
• RAC criticises oil companies
• VAT increase coming , too

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Fuel prices are expected to rise sharply in the approach to Christmas, according to the RAC.

The RAC is predicting that drivers could be facing the prospect of £1.10 a litre for unleaded petrol by the middle of December. The current average price for a litre of petrol is £108.6, according to petrolprices.com.

Fuel costs 25% more than in 2008
Although the international price of oil remains lower than during last year's peak, average UK fuel prices have been climbing for several months – the cost of a litre of fuel is now around 25% higher than in the same period last year.

Prices at the pumps are now as high as they were when crude oil cost more than $100 a barrel - but the cost of crude at the moment is around $80 a barrel and oil companies are making big profits.

'It's about time oil companies became more transparent with their pricing so that motorists can clearly understand why these prices rises happen,' said John Franklin of the RAC. 'Otherwise motorists will continue to feel like an easy target.'

The RAC is also warning motorists that the return to a 17.5% VAT rate in January will add another £1.50 to the cost of filling-up an average family car.