Fuel duty hike ‘may stop UK bouncing back’, campaigners warn

Rishi Sunak faced growing calls not to raise fuel duty last night as it emerged the cost of filling up has surged £4 in two months.

Average petrol prices have soared 7.5p per litre since December, adding £4.13 to the cost of filling up a 55-litre family car, an AA report revealed.

Currently, it costs £67.01 to fill a petrol car and £68.70 for diesel.

Separate analysis by the RAC warned fuel prices could surge by more than 20p per litre to a record high next year if global oil prices continue to rise.

It comes after 14 consecutive weeks of price rises at the pumps.

Last night, motoring groups and campaigners warned any further rises from a fuel duty increase would put ‘unprecedented’ financial pressure on already hard-pressed families who will be using their cars more in the months ahead as Britain begins opening up after lockdown.

The Mail also revealed on Wednesday how MPs warned a rise in the levy could ‘devastate’ the haulage industry by adding up to £2,250 to lorry drivers’ annual fuel bill.

Fuel duty has been frozen at 57.95 pence per litre for petrol and diesel since 2011.

But Mr Sunak is rumoured to be considering a raise of up to 5p per litre in next month’s Budget to help get the public finances under control.

A 5p increase would add an extra £2.75 to the cost of filling a typical 55-litre tank.

The RAC’s fuel spokesman Simon Williams said: ‘With the Budget now less than two weeks away, the last thing drivers – and possibly the economy – need is a fuel duty increase.

‘A hike in duty at a time of rising fuel prices could put unprecedented pressure on lower-income households and might have the negative effect of forcing everyone who depends on their cars to consider cutting back on other spending.’

The AA’s Luke Bosdet said: ‘There is going to be a real sense of being under assault for needing to drive a car. The bonus that the fuel trade is giving itself is just part of the financial pressure likely to be heaped on drivers – particularly those on lower incomes.’

The AA report found average pump prices this week hit nearly 122p per litre for petrol and 124.91p for diesel – prices last seen before the pandemic. 

This was up by 3p for both in a month – and 7.5p for petrol since early December when average prices were around 114.5p per litre.

The surge has been fuelled by a hike in global oil prices that rose by 20 US dollars (£14.34) a barrel over the last three months to $64 (£46) this week.

By the end of this year, RAC analysis predicts oil prices could hit $80 (£57.36) a barrel and mean average petrol prices hit 130p per litre and 134.5p per litre for diesel.

That would add a further £4.40 to filling up a 55-litre petrol car and £5.20 for diesel.

Analysts also warned average petrol prices could next year hit 143p per litre and 148p per litre for diesel – an all-time record and the highest since 2012.