The RMI Independent Petrol Retailers Association is predicting a minimum 5p per litre increase by the end of March with the possibility of a 10p hike by the end of the year.

The key drivers of price rises and price risks according to the group, which represents two thirds of the 9,000 petrol forecourt sites in the country, include VAT returning to 17.5% on January 1 and the planned inflationary increase along with a 1p per litre rise in April.

The Government is also withdrawing its duty incentive to refiners for the production of biofuel from April, which the association claims will result in an increase in duty that will be passed on to consumers in the form of a 1p per litre rise at the pumps.

Finally, it says that any new Government will need to raise taxation and the prospect of VAT increasing to 20% has already been mooted by the city.

This alone would add a further 2.5p per litre to the price of fuel, but there is also the possibility of a snap budget post election which could lead to a further fuel duty hike of 2p per litre in the autumn.

With all of these factors considered, this will equate to a 5p per litre increase in fuel prices by the beginning of April 2010, with the possibility of up to a 10p per litre rise solely from UK taxation by October, 2010.

Brian Madderson, chairman of the RMI Independent Petrol Retailers Association, said: “The predicted 10p per litre rise does not take into consideration any increase in the world oil price which is also a possibility and could add another 3 to 5p per litre to forecourt inflation.”