The RAC has described the rise as “a dark day for drivers” and, ahead of this week’s Budget, is calling on the Government to cut VAT on petrol. The average price of petrol soared to a record high on Sunday – climbing to 142.94p a litre, breaking the 2012 record of 142.48p.
Diesel is also not far behind setting a record of its own with average prices at 146.50p, just 1.5p off a 2012 high of 147.93p.
Describing the figures as “a dark day for drivers”, RAC Fuel Spokesman Simon Williams warned: “The big question now is: where will it stop and what price will petrol hit? If oil gets to $100 a barrel, we could very easily see the average price climb to 150p a litre.”
Oil is currently at $85 a barrel, up from around $40 a year ago, with Goldman Sachs recently increasing their end of year prediction to $90 a barrel.
The latest blow to costs of living will put greater pressure on Chancellor Rishi Sunak who is understood to already be considering cuts to VAT on household energy bills in the Budget this week, a move backed by the Labour Party.
The RAC have called for VAT cuts to also be considered for petrol, with Mr Williams saying: “We urge the Government to help ease the burden at the pumps by temporarily reducing VAT and for the biggest retailers to bring the amount they make on every litre of petrol back down to the level it was prior to the pandemic.”
Currently, VAT makes up 23.69p of the cost of every litre of petrol whilst fuel duty adds another 57.95p. Fuel duty has been frozen for 11 years with strong support for continuing the freeze coming from backbench Tory MPs, such as Robert Halfon and Criag Mackinlay. Further details will be laid out in Rishi Sunak’s Autumn Budget on Wednesday.