Hauliers say UK fuel taxes are out of line with the rest of Europe

The Petrol Retailers Association (PRA) made the prediction after three days of protests over high prices made a very low-key start on Wednesday.

With no repeat of the blockades seen in 2000, as yet, the PRA said prices would drop as global oil and petrol prices have retreated from post-Katrina highs.

Other business groups have called on the government to lower fuel duty.

Market normalisation

The PRA said global petrol prices were falling as supplies returned to normal.

"Next week, when things have calmed down again, we'll see prices fall due to falling wholesale prices," said Ray Holloway of the Petrol Retailers Association.

"We'll return to pre-Katrina levels at the pump and that will happen next week."

The Automobile Association (AA) also predicts that UK petrol prices will soon calm, but at a slower rate.

"I'd expect petrol prices to fall, but more slowly than 4 p a litre by the end of next week," said Luke Bosbet of the AA Motoring Trust.

'European disadvantage'

Business groups such as the Institute of Directors (IoD) and the Forum of Private Business want the UK to follow the lead of France, Austria and Poland, which are either cutting excise duties or have announced rebates for key industries.

Facts and figures behind UK petrol price rises At-a-glance

The IoD points to the fact that duty now accounts for 65% of the cost of a litre of diesel.

The average cost of unleaded petrol in the UK is currently 4.6% higher than three weeks ago, while diesel prices have risen 2.5%.

Chancellor Gordon Brown has ruled out cutting duty on fuel, but Transport Secretary Alistair Darling said the Government had already moved to keep prices as low as possible.

"We have not put the inflation increase through [on fuel] for the last couple of years," said Mr Darling.

"Indeed, since 1999 fuel prices have come down both in real terms and cash terms, in terms of the duty."

Business fears

The immediate impact of Hurricane Katrina saw world oil prices touch a record $70.85 a barrel, but have since fallen back below $64.

Yet one leading haulage company said fuel prices had risen 20% this year as a whole and that fuel duties in the UK were out of line with the rest of Europe, leaving British firms at a disadvantage

"We are now in a situation where many haulage companies are struggling because of increased competition and a slowdown in the economy," said Ian Baxter, managing director of RH Freight.