UK petrol and diesel prices hit new record highs

The prices of fuel at UK forecourts have hit record highs, as the cost of living crisis intensifies.

The average pump price for petrol reached 167.64p a litre, the RAC said, surpassing the previous record of 167.30p set on 22 March.

Diesel prices rose to an average of 180.90p a litre at the end of Tuesday, passing the previous peak of 180.29p reached on Monday. The prices of both fuels could be pushed higher by a full EU ban on Russian energy imports

RAC fuel spokesman Simon Williams said:

“Despite the Chancellor’s 5p a litre duty cut, the average price of petrol hit a new all-time high on Tuesday by reaching 167.64p a litre, further contributing to the worsening cost-of-living crisis.”

“The significance of this landmark is made all the greater by the fact the previous petrol record price – 167.30p – was set the day before the Spring Statement when Mr Sunak slashed duty to 52.95p a litre.”

“While the average price of both petrol and diesel would have been far higher without the historic duty cut, it’s also unfortunately the case that drivers haven’t seen the full benefit at the pumps due to major retailers upping their margins.”

“With diesel also climbing to its third record high in four days at 180.88p drivers are feeling never-before-seen pain at the pumps – a full 55-litre tank of petrol now costs £92.20 and diesel £99.50.”

What makes up the cost of a litre of fuel?

The price you pay for petrol and diesel at the pumps is governed by wholesale fuel prices, which in turn, are affected by:

• the global price of crude oil
• supply and demand for crude oil
• oil refinery production and capacity
• the pound to dollar exchange rate, as refined fuel is sold in US dollars per metric tonne
• distribution costs
• the margin fuel retailers decide to take
• fuel duty charged by the Government, currently 52.95p a litre
• VAT charged at the end of every forecourt fuel transaction, currently at 20%

While some of these stay largely static - such as the fuel duty rate and VAT - others such as the oil price and dollar to sterling exchange rate can be very volatile. This explains why prices rise and fall. A combination of high oil prices and weak Sterling leads to the highest pump prices.