According to reports, the average price of unleaded petrol has risen to a new 137.44p per litre record. The previous record was an average 137.43p per litre, which hit British motorists in May last year. This has meant that petrol prices have jumped over 1.25p in the last week.
Drivers in the UK are spending over £6.8 million a day extra on fuel in comparison to a year ago. However, this figure increases to a huge £24 million a day more compared to two years ago. This is because it costs £3.45 more than a year ago to fill an average 50-litre tank with petrol. Compared to two years ago, the cost has risen about £12.30.
This has meant that the monthly cost has soared for families with two petrol vehicles that each consume an average 106.17 litres per month. In the last week, the cost has jumped by over £2.65, while it’s risen £14.65 in the last year and about £52.24 in the past two years. Because of the rising cost of fuel, especially with a record high, fuel campaigners have called on Chancellor George Osborne to axe the 3p per litre increase in fuel duty scheduled for August. However, it’s reported that he won’t alter the current plans.
Petrol prices have been pushed up by the price of oil, which in turn has risen due to unrest in Iran and tensions over its nuclear plans. Oil has also been made more expensive for British buyers because of the weak pound. Brent crude oil prices hit $128.40 per barrel in New York on Thursday, a 43-month high.
AA president Edmund King says that the new petrol and diesel records only confirm what all families and businesses know – they are being badly hurt by the prices and there doesn’t seem like a way to stop them. His organisation has asked Osborne to do what he can to protect the nation’s economy from the unpredictability of the fuel market and record high costs. There’s no more flexibility in family and business budgets, even though they have cut back on spending (including fuel purchases) so they can commute and go about their lives. Britain can’t recover if fuel prices continue holding motorists and businesses to ransom every time the market moves.
Meanwhile, the price of diesel hit a record 144.67p per litre earlier last week. In a survey from the Countryside Alliance, the price of diesel was found to be an average 4p per litre more in rural areas than in urban areas. It found that diesel in Purbeck and Ryedale was 146.9p but only 139.7p in Dartford and Birmingham. The Countryside Alliance says cars are becoming an unaffordable need for many people who live in rural communities. They too are pressing the chancellor to scrap the forthcoming fuel duty hike.
Fair Fuel UK has also joined the effort to urge Osborne to cut the fuel duty from the Budget, which will be published this month. All of this follows research showing that drivers in Britain already pay the highest tax on fuel across all of Europe. Founder Peter Carroll has told reporters that the level of tax is “unsustainably high”.
The SNP has even accused the chancellor of “highway robbery”. Transport spokesman Argus MacNeil says that the fact that the UK is paying the highest fuel prices in Europe is a scandal. With most of petrol and diesel prices being made up of duty, the Treasury has to stop the robbery. Soaring fuel costs are slowing down the recovery of the economy, and the country needs a permanent stabilisation solution to control the prices.
However, Lloyds Banking Group economist Travel Williams says that getting rid of the planned 3p per litre rise in fuel duty would cost £5.7 billion for the government. Additionally, reducing the tax 5p per litre, which some organisations have suggested, will cost £9.5 billion.