Price of diesel hits £2 per litre for first time
Rise sparks AA to call on the government to cut VAT by 10p
The cost of a litre of diesel has hit £2 for the first time ever, as fuel prices continue to surge.
Data from the RAC shows that the average cost of diesel at a motorway service station is now 200.99p, with petrol prices currently at 197.18p.
Away from the motorways, the average cost of diesel sits at 188.82p – a rise of 4.5p this week – and petrol at 183.16p, a 7p rise in the same time.
Yesterday, the price to fill up a typical 55-litre family car, such as an Audi A3 or a BMW 3 Series, hit the £100 mark for the first time, sparking the AA to call on the government to cut fuel tax by a further 10p.
On Tuesday, the price of petrol rose by more than 2p in just 24 hours - the biggest daily increase in 17 years.
The latest rise has sparked an angry response from AA president Edmund King, who has demanded the government “act urgently” to reduce the record fuel prices, which are “crippling the lives of those on lower incomes, rural areas and businesses”.
He has also called on ministers to introduce a fuel price stabiliser, which would work by reducing fuel duty when prices go up and increasing it when prices drop.
King said: “A fuel price stabiliser is a fair means for the Treasury to help regulate the pump price but alongside this they need to bring in more fuel price transparency to stop the daily rip-offs at the pumps. The £100 tank is not sustainable with the general cost of living crisis so the underlying issues need to be addressed urgently.”
Meanwhile, RAC fuel expert Simon Williams labelled the fill-up rise a “truly dark day”, adding: “With average prices so high, there’s almost certainly going to be upward inflationary pressure, which is bad news for everybody.”
Earlier in the week, the RAC claimed the UK was on the brink of a fuel crisis. It called for urgent, “radical government intervention” to prevent a national fuel crisis.
“More radical government intervention is urgently needed, whether that’s in the form of a further reduction in fuel duty or a VAT cut,” Williams said on Monday.
“As it is, drivers surely won’t be able to cope unless something is done to help… This is fast becoming a national crisis for the country’s 32 million car drivers as well as countless businesses.”
This rise has been driven by the soaring costs of wholesale oil, but analysts predict the price of a barrel will average out at $135 (£107.66). It needs to reach $160 (£127.66) for petrol to hit £2 per litre.
Sanctions on Russia following its invasion of neighbouring Ukraine have also heavily contributed to rising fuel costs. Russia is one of the biggest producers of oil in the world and it supplied 18% of the UK’s diesel fuel last year.
This coupled with a weak pound and large post-Covid worldwide demand has caused prices to skyrocket. However, the wholesale price of petrol dropped yesterday by 5p, sparking hope of prices levelling out.
Earlier this week, AA fuel price expert Luke Bosdet claimed many drivers stayed at home over the bank holiday weekend due to the price rise.
He said: “Shock and awe is the only way to describe what has been happening at the pump during the half-term break. Little wonder that nearly half of drivers stayed at home for the Jubilee-extended bank holiday.”