Oil firms profit as prices soar

Business Editor Amy Bould reports on how soaring fuel costs are hitting readers' bank balances.The price of unleaded petrol has hit more than £5 for a gallon, which could see motorists soon paying more than £2,600 a year to fill up their car.The driver of an average-sized family saloon is seeing a £70 hole in the pocket for a full tank, compared to £60 a year ago.

And for diesel drivers, the cost could be more like £80 with its cost rising by a quarter in the last 12 months and by nearly half since 2003.

According to the AA, the average price of a litre of unleaded was 110.6p this week, or £5.03 a gallon - nearly 20 per cent dearer than a year ago. Diesel was averaging out at 120.95p a litre.

Most drivers appreciate that the global price of oil is chiefly to blame. Barrels of the black stuff are changing hand for more than $130 but experts have warned it could top $200 a barrel.

The Environmental Travel Association said the £2,600 cost to fill up accounts for almost 15 per cent of the average take-home pay of just over £19,000 a year.

And it's not just ordinary motorists feeling the pinch, hauliers are facing tough times with every rise in fuel causing their bills to rise by thousands.

Shropshire and Mid Wales hauliers claim oil companies like Shell and BP, who reported combined profits of more than £7 billion during the first three months of the year, are profiteering on the back of rising fuel prices and believe the Government should step in.

The figures from both firms were well ahead of the equivalent periods last year - 12 per cent higher for Shell and up 48 per cent for BP.

Shell made a surplus of £13.9bn in 2007, equivalent to more than £1.5 million an hour.

The company said most of its money comes from exploration and production, rather than from selling petrol on UK forecourts.

But some county truckers were so incensed by the rising fuel prices that they blocked the entrance to a major oil refinery for three hours in a protest over the hikes on May 1.

Jim Jordan, of Shrewsbury-based Jordan's Transport, said: "We need to make sure people are aware of how the fuel prices are affecting us.

"We have a big problem with fuel. We can't do anything about the price, but we can do something about the tax."

The protest at Ellesmere Port followed a demonstration by around 250 lorries in Central London, organised by haulage protest group Transaction-2007.

Protester Huw Thomas, 47, who runs a timber haulage company in Rhayader, Powys, said: "Fuel prices are absolutely ridiculous. It's going to finish us in a few weeks the way things are going."

The haulage companies want the Government to step in, either by forcing a windfall tax on the booming oil companies or taking action on fuel duty.

Around 68p of every 110p litre of petrol goes to the Exchequer, with fuel duties accounting for about 4.5 per cent of the Treasury's revenue.

Roger King, chief executive of the Road Hauliers Association, called for a windfall tax on the leading oil companies, saying:"Investment in the haulage industry could come from a windfall tax or from the Government's own profits from extra VAT on fuel. We are under the cosh and hauliers are the most taxed sector of the UK economy."

He urged the Chancellor to scrap the 2p rise in fuel duty now planned for October.

"We want him to make clear now that the October increase will also be shelved," he said.