UK petrol prices have hit their highest level on record and could rise further in the coming weeks as the global energy crisis drives oil markets to a three-year high.
The average daily price for a litre reached 142.94p on Sunday, surpassing the all-time record 142.48p reached on 16 April 2012, according to data from the RAC/Experian.
The new price, which was predicted by analysts late last week, is 28p a litre higher than a year ago, when petrol cost about 114.5p. This will add £15 to the cost of filling up a family car with a 55-litre tank, to about £78.61 from £63 last October, piling further financial pressure on households this winter.
Petrol prices have climbed steadily in line with global oil market prices which have more than doubled from about $40 (£29) a barrel a year ago to about $85 in recent weeks because of a sudden rise in post-pandemic energy demand.
The price of Brent crude reached $86.09 a barrel on Monday morning, the highest since it reached $86.43 in October 2018, which is likely to lead to further price increases at the pumps.
Simon Williams, a spokesperson for the RAC, said it was “a truly a dark day for drivers” that would “hurt many household budgets and no doubt have knock-on implications for the wider economy”.
The RAC has called on the chancellor, Rishi Sunak, who will deliver the government’s autumn budget this week, to temporarily reduce VAT for the biggest retailers to bring the amount they make on every litre of petrol back down to its level before the pandemic.
“Even though many people aren’t driving as much as they have in the past due to the pandemic, drivers tell us they are just as reliant on their cars, and many simply don’t have a choice but to drive. Those on lower incomes who have to drive to work will seriously struggle to find the extra money for the petrol they so badly need,” Williams said.
“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,” he said.
The US bank Goldman Sachs predicted last month that global oil prices could continue to climb to $90 a barrel by the end of the year, while its rival Bank of America said a cold winter could lead to the price of Brent hitting $100 a barrel within months.
The AA’s fuel price spokesperson Luke Bosdet said: “Whether it’s down to oil producers, market speculators, Treasury taxes or struggling retailers trying to balance their margins, record pump prices must be saying to drivers with the means that it is time to make the switch to electric.
“As for poorer motorists, many of them now facing daily charges to drive in cities, there is no escape. It’s a return to cutting back on other consumer spending, perhaps even heating or food, to keep the car that gets them to work on the road.”