Exchange rates and the price of petrol

Interesting item on Wake Up to Money this morning when the correspondent talked about the reasons behind the record price of oil on the international market. We know that the basic price has been increasing of late but we also know that the budget reduced the duty on fuel by 1p per litre. What is easily overlooked is the fact that  paying for our oil in £s is a costly exercise now that the value of sterling has fallen on the international market by as much as it has. Why is this the case? Well, with interest rates in the UK as low as they are, speculators are simply not depositing funds in UK banks and therefore 'hot money' is not flowing in. This has resulted in a reduction in demand for sterling and a consequent decrease in its value. When we want to buy dollars on the international exchange with which to purchase our oil, we get fewer for each £ and therefore the price we pay for oil has effectively risen. Of course, the low pound is good for exporters but we are predominately an importer of oil and there's the rub!