£2 per litre

Driving groups have called for more support to help drivers with soaring fuel prices.

It comes as the cost of filling an average family car with petrol hit £100 for the first time.

The RAC motoring group called it “a truly dark day” as the cost of filling a 55-litre tank reached £100.27 for petrol and £103.43 for diesel.

Cost of living

The cost of fuel is adding more problems to the cost of living crisis. It follows as a hangover from the international pandemic, but more directly Russia’s invasion of Ukraine. Diesel supplies are particularly reliant on Russian supplies. However, these  supplies are now sanctioned as economic pressure is placed on the Russian government.  The RAC and its rival the AA urged the chancellor to cut VAT on fuel or to reduce fuel duty further.

Population pressure

The Treasury said it had provided £37bn to ease the cost of living already.

Rising petrol prices are putting pressure on household budgets, with energy bills and food prices also now at multi-year highs.

Pump prices began to soar after Russia’s invasion of Ukraine in February led to oil supply fears. However, there are concerns that petrol retailers are not passing on a recent 5p cut in fuel duty to consumers.

According to the RAC, the average pump price of a litre of unleaded petrol is now 182.31p while for diesel it is 188.05p. However, the motoring group has warned this could rise to over £2 a litre soon. In fact some garages are already charging over £2 as they look to make a profit as the economic crisis forces people to leave their cars at home. Footfall on garage forecourts is declining, lowering their ability to sell other products that bring them more profit than fuel sales.

RAC fuel spokesman Simon Williams said: “While fuel prices have been setting new records on a daily basis, households up and down the country may never have expected to see the cost of filling an average-sized family car reach three figures.

“A further duty cut or a temporary reduction in VAT would go a long way towards helping drivers, especially those on lower incomes who have no choice other than to drive.”

The AA called on the government to cut fuel duty by 10p per litre immediately and introduce a “fuel price stabiliser”, which would reduce fuel duty when petrol prices go up and increase it when they drop.

The wholesale price of petrol has actually dropped by 5p since 1 June, from £1.55 a litre to £1.50 this week.

But motoring groups say it takes time for changes in the wholesale price to feed through to the pumps. This is largely due to forecourts buying fuel in advance.

On Wednesday, the highest price was found to be 202.9p a litre.

The government has so far ruled out cutting VAT. It argues that any increases in receipts it gets from higher fuel prices will be largely offset by reduced household spending and VAT on other items. 

Instead, Downing Street has indicated that fuel retailers failing to pass on the 5p duty cut could be named and shamed.

Lisa Stevenson, who owns Tolladine service station near Worcester, blames the market. She told the BBC her prices per litre – at 197.9p for unleaded and 194.9p for diesel – were purely the result of volatile wholesale fuel prices driven by the Ukraine war.

She added that customers were now buying less fuel because of the soaring costs: “A delivery of fuel would previously have lasted me a week to 10 days, now its 2-3 weeks.”

The rise in fuel costs is not just affecting private motorists. Hauliers and every other part of a motorised society is affected. The costs soon filter through into inflationary pressures on all our goods a services. It is yet another significant influence on rising inflation, which is already above 10%, its highest level for decades.