Petrol is back above £1.65 a litre for the first time since Rishi Sunak cut fuel duty by 5p – as the AA warns drivers should brace for ‘much higher’ rises
- Average UK petrol price rose to 165.05p on Wednesday – the first time above £1.65 since the Chancellor announced the fuel duty cut on 23 March
- Diesel is also up to 179.55p a litre this week – that just 0.35p off the UK record
- AA says prices drivers can expect to see forecourt prices rise in coming weeks
- Increased US summer demand traditionally inflates price of oil this time of year
The cost of filling up will hit record highs in coming weeks, warned the AA, after it confirmed average petrol prices had risen above £1.65 a litre – for the first time since the Chancellor’s fuel duty cut in March.
Official data shows the average unleaded price is now up to 165.05p, while diesel has edged within 0.35p of the current record, after reaching 179.55p this week.
The motoring group says drivers should brace for pump prices to rise ‘much higher’ and ‘prepare their finances for further substantial increases’.
The UK average price of petrol has remained below £1.65 a litre since the Chancellor announced the 5p cut to fuel duty on 23 March
Wednesday was the first time the UK average price of petrol exceeded £1.65 since 23 March, the day of Rishi Sunak’s spring statement where he announced measures to ease the burden of the cost of living crisis on Britons.
The day before the Chancellor announced he was immediately lowering the amount of tax paid on each litre of fuel by 5p, unleaded was at a record high of 167.30p.
On 23 March, it dipped below £1.65 and until yesterday hadn’t gone above that price.
With drivers of vehicles powered by diesel engines already paying close to record pump prices, the difference in the cost of filling up compared to last year is stark.
Forecourts were charging an average of 127.97p for petrol and 130.30p for diesel on 12 months ago – 37.08p and 49.25p per litre less than today respectively.
That means filling the typical 55-litre petrol tank is now £90.78, compared to £70.38 a year ago, says the AA, a rise of 29 per cent.
For someone using a Transit-type van, the cost of refuelling an 80-litre tank is almost £40 more expensive, rising from £104.24 in May 2021 to £143.64 this week.
And the motoring group says worse looks set to come for the nation’s drivers in the coming weeks, despite the fact their cars will be more economical in the next few months than what they are in the winter.
‘Petrol prices look to rise much higher in the coming weeks and people who rely on their cars for essential daily trips, such as driving to work, need to prepare their finances for further substantial increases,’ explained Luke Bosdet, the AA’s fuel price spokesman.
‘The summer weather and more driving in daylight will take some of the sting out of the pump price rises.
‘Motor vehicles should be getting better fuel consumption compared to March.’
The AA said pump prices were always set to spiral again, as rising summer demand in the US generally inflates the price of oil at this time of the year.
‘Rapid price increases on the forecourt boards will be what catches drivers’ attention,’ Bosdet added.
‘In one respect, the price increases were predictable given that the summer motoring season always leads to higher petrol costs – US demand always shoots up and increases commodity values.
‘However, the rising price of oil and weaker pound have contributed also.’
What is fuel duty?
When the Chancellor announced a 5p-a-litre cut to fuel duty, it presented an opportune time to give you a refresher course on what it actually is.
Rishi Sunak confirmed in his Spring Statement that he has trimmed the levy on every litre of fuel from 57.95p-a-litre to 52.95p as part of efforts to ease the burden of record petrol and diesel prices on motorists.
It is only the second cut to fuel duty in 20 years (the first was in March 2011) and the lower rate of duty will be kept in place until March 2023. The RAC calculates that it will reduce the cost of filling a typical 55-litre family petrol car by around £3.
Here we explain how much fuel duty contributes towards the total cost of petrol and diesel, when it was first introduced, how expensive it is in comparison to taxation in other countries and what the future is for the levy when cars switch to electric power…
> Read our fuel duty explainer here
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