Debt help: Rising petrol prices driving inflation

22/02/2010

People struggling with debt may be forced to tighten their purse strings even further as fuel prices look set to stay high.

According to motoring body the AA, fuel prices in the UK have hit a "plateau" of around £1.12 a litre for petrol and £1.14 a litre for diesel.

February saw a drop in the wholesale prices of around 2p but many providers have failed to pass this on to the consumer.

As fuel prices continue to add to the daily cost of living, some people may want to seek debt help in order to manage their finances.

Earlier this month, the governor of the Bank of England Mervyn King, explained in a letter to the Chancellor Alistair Darling that the rising price of crude oil was partly responsible for driving up the rate of inflation.

Mr King said: "Over the past year, oil prices have risen by around 70%. That is pushing up petrol-price inflation significantly, which, in turn, is raising overall CPI inflation."

Director of EuroDebt Kevin Still commented: "For those reliant on a car for their job or family commitments then this really will hit hard and will have the effect of reducing disposable income. With many having to pay by credit card for fuel costs this is a double whammy and may create the need for debt help or potentially a long-term debt solution.

"Rises in fuel costs can really impact the self-employed where they are not able to fully recover the costs from their clients. VAT increases are a killer for those earning below the threshold because they can't recover the cost increases – which may get worse."

Posted by Jim Mead

Tags; Current UK Economy,

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