Price of petrol hits a NINE YEAR HIGH of 140.22p per litre - just 2p short of the all-time record from April 2012

  • Petrol prices have risen by nearly 26p-a-litre in 12 months, RAC Fuel Watch says
  • On 15 October 2020, the average cost of unleaded was just 114.50p per litre
  • It says the biggest contributor to escalating prices is oil rising to $83-a-barrel
  • Experts predict oil could continue its upward trajectory to $90 by Christmas
  • This would ultimately push petrol over record high of 142.48p set in April 2012
  • The RAC has called on the Government to temporarily cut VAT paid on fuel to ease the financial burden on the nation's motorists 

By Rob Hull For Thisismoney.co.uk

Published: | Updated:

The average price of a litre of petrol sold at UK forecourts has reached 140.22p, the highest level since September 2012.

With pump prices driven up by both a rising oil price and the petrol shortage triggered by a lack of tanker drivers, this means  unleaded prices are now just 2p off the record high seen in April of the same year, RAC Fuel Watch data shows.

Prices have now gone up by nearly 26p-a-litre in just 12 months, from 114.50p on this day last year – a jump of 22 per cent, records show. 

Petrol at a nine-year high: The average litre of unleaded has risen to 140.22p per litre, which is just 2.26p short of the all-time record for petrol set in April 2012

Petrol at a nine-year high: The average litre of unleaded has risen to 140.22p per litre, which is just 2.26p short of the all-time record for petrol set in April 2012

While many will point at greedy retailers taking advantage of recent fuel shortages the motoring group says the major contributor to the near-record high price of unleaded is the rising cost of a barrel of oil, which in the last year has doubled from $41 to $83.

However, the oil price is only one part of what drivers pay at the pumps, with 57.95p per litre being fuel duty with VAT charged on top of that. 

The rest of the cost charged at the pumps is for delivery and retailers' margin. 

Nonetheless, motorists report some garages are charging far more for petrol and diesel than others, particularly in the South East where queues for petrol and forecourts running dry have been most commonplace.

Many will point the finger at greedy retailers for hiking prices during recent fuel supply issues but the RAC says the major contributor is the rising cost of a barrel of oil, which in the last year has doubled from $41 to $83

Many will point the finger at greedy retailers for hiking prices during recent fuel supply issues but the RAC says the major contributor is the rising cost of a barrel of oil, which in the last year has doubled from $41 to $83

As a result of the rising cost of oil, drivers are now paying 4p more in VAT on a litre of petrol than they were a year ago – from 19p in October 2020 to 23p-a-litre today.

Forecourts' September switch to E10 petrol – which increased the biofuel content of unleaded from 5 per cent to up to 10 per cent - has also contributed slightly to the price rise by adding around a penny a litre to the cost before VAT is applied.

How close are we to record fuel prices? 

Unleaded prices reached a record high in April 2012, of 142.48p a litre - or 2.26p more than current levels.

Diesel prices hit record highs in the same month (April 2012), reaching 147.93p a litre - or 4.34p more than today.

The average price of diesel is also on the rise, currently sitting at 143.42p.

This is the highest price of diesel since April 2013 (143.59p), though still 4p-a-lite off the record of 147.93p set in April 2012. 

RAC fuel spokesman Simon Williams said the Government now needs to seriously consider temporarily cutting VAT on fuel to ease the financial burden on the nation's motorists.

'At a time when households and businesses are facing spiralling prices in other areas, this [near record-high petrol prices] is a huge concern.

'With just two weeks to go until COP26, the uncomfortable truth for the Government is that petrol prices are now reaching unprecedented levels and, along with rising domestic energy prices, will be putting a huge financial strain on households that depend on their vehicles and, in turn, the economy. 

'We call on the Government to take action and do whatever it can to help ease the burden on drivers.

RAC tips to find the cheapest fuel 

Get to know the filling stations close to where you live and work. 

Assuming there is competition between retailers, which seem to be competitive on price? 

Even taking a small detour to visit a cheap forecourt can save you a few pence per litre. 

Over one tank that’s noticeable: over 12 months’ motoring, that’s a saving that could stretch into the hundreds. 

And look beyond the supermarkets too - some independent retailers can be extremely cost-competitive. 

 

'While the cost of oil has more than doubled in a year, the price drivers pay at the forecourt is compounded by the fact there is nearly 58p in fuel duty charged on every litre. And, on top of the delivery cost and the retailer's margin, you've then got VAT which currently accounts for 23p a litre – this has added 4p more a litre in just a year.

'For these reasons, it might be most effective for the Government to consider temporarily cutting the level of VAT on motor fuel to help hard-pressed drivers. 

'While there have been calls for fuel duty to be cut in the past, there is a real risk that any such cut could be swallowed up by retailers rather than benefiting drivers. 

'As VAT is charged on the final cost at the pumps, drivers would see the benefit immediately.'

Earlier this month, the RAC warned motorists that fuel prices are set to edge closer to the all-time high of 142.48p from April 2012 as the price of oil is projected to continue rising towards $90-a-barrel by Christmas, which would put a further strain on household finances. 

Currently, there are substantial local petrol price differences between retailers attached to oil companies and supermarkets.

Prices at the four major supermarkets in September were 4p-a-litre cheaper than the UK average, though readers have told us they are seen differences of up to 11p in their areas.

Top tips for reducing your car's fuel consumption 

1. Make sure the vehicle is in tip-top running order

Regular maintenance and servicing improves the efficiency of your vehicle, and therefore can improve your fuel consumption.

2. Check tyre pressures

Ensuring your tyres are correctly inflated is key to making your car run efficiently. Check the owner's manual or a sticker on the door sill to find out what the optimum pressures are for your vehicle. 

3. Use 'eco' mode if your car has it

Many modern motors are fitted with adjustable driving modes. If yours does it is likely to have an 'eco' setting, which restricts how quickly the car accelerates but will help reduce fuel consumption. 

4. Be gentle on the throttle

If you have a car without adjustable driving models, try to be as easy on the throttle pedal as possible when you can.

Excessive speed is the biggest fuel-guzzling factor so having a light right foot and ensuring all acceleration is gentle is very important to fuel-efficient driving.

When you set off from a standstill, such as at traffic lights and junctions, try not to react like you're on the starting grid at Silverstone.

5. Use the highest gear possible 

The RAC says that the biggest secret to achieving high mpg (miles per gallon) is driving in the highest possible gear for your vehicle while keeping within the speed limit. 

'The best advice in urban areas is to change up through the gears as quickly as you can with the lowest revs possible, probably at around 2000rpm,' it says. 

6.  Anticipate well ahead  

Heavy acceleration will sap fuel economy, but braking too heavily also has the same impact, as you can use less fuel by coming to a standstill more gradually.

This requires a driver to anticipate traffic flow ahead, but is a great way of limiting fuel use.   

7. Cruise control isn't the answer

While many will believe that using cruise control functionality will provide the lowest fuel use, this isn't always the case.

Cruise control is most likely to benefit mpg on motorways with a constant speed and a flat surface.

However, if you were to use your cruise control regularly and not on flat roads, you would see fuel consumption increase.

'This is because your cruise control would be slower to react to gradient changes, meaning when reaching the brow of a hill – at which point you would normally take your foot off the accelerator to maintain more of a constant speed when descending – your cruise control will keep the power on for a little longer as it’s unable to see the gradient change in front of you. Driving in this way regularly would lead to worse fuel consumption,' says the RAC. 

8. Avoid using the air-con and heater

Don’t use your air conditioning unless you really have to as it uses engine power and therefore increases fuel consumption.

This shouldn't be an issue in these cooler months, though using a car's heater will have a similar impact, with it running off the engine power and therefore lowering fuel economy. 

Dress accordingly for the weather, is the best advice. 

9. A warm engine is more efficient, so combine journeys  

Once an engine is warm it will operate most efficiently, whereas several cold starts will increase fuel consumption.

So if you have a number of errands or trips in a day, try to do all of them in one go.

10. Lighten the load

While this isn’t going to make the biggest difference to your mpg figures, emptying heavy clutter from your car will fractionally improve its fuel economy.

And if you're not using roof bars and a roof box, take them off as it could make your motor less drag efficient.  

According to the Energy Saving Trust, an empty roof rack adds 16 per cent drag when driving at 75mph. At the same speed a roof box adds 39 per cent, making your vehicle much less fuel efficient.

Driving with an open window also has a similar effect.

Price of petrol hits a NINE YEAR HIGH of 140.22p per litre

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