RAC fuel spokesperson Simon Williams said the average price of petrol climbed more than 2p (2.23p) a litre on Tuesday taking it to nearly 181p a litre (180.73p).

“Diesel increased by almost 1.5p to yet another record high at 186.57p. A full tank of unleaded has now shot up to £99.40, moving us ever closer to the milestone £100 petrol fill-up – an unfortunate landmark we may reach as soon as tomorrow,” he said on Wednesday morning.

“RAC Fuel Watch data also shows that Asda hiked its average petrol price nearly 5p a litre in a single day which is unheard of. As it stands the average petrol price at the big four supermarkets, which dominate fuel retailing, is now 173.37p, while diesel is 182.38p.

“This makes a litre of unleaded more than 7p cheaper at a supermarket which is significantly above the norm of 4p below the UK average. For this reason we expect the other supermarkets to increase their prices today to close that gap as Asda is traditionally the cheapest retailer.”

Mr Williams said the UK is experiencing unprecedented times in terms of the accelerating cost of forecourt fuel.

“Sadly, it seems we are still some way from the peak. While the average price of diesel is heading towards £2 a litre, the cost of wholesale petrol unexpectedly dropped around 5p a litre on Tuesday. If this price is maintained in the coming days it could stem the flow of daily record petrol prices,” he said.

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The stats show that Northern Ireland still has the lowest unleaded and diesel prices, but the February increase in the average price of petrol across the UK was the fastest since a new monthly record was set last October when unleaded went up 7.5p and the eighth largest monthly rise on record. A litre of unleaded ended the month at 151.16p, up from 146.62p at the start.

Prices hit a new all-time high on Sunday 27 February of 151.25p. The increases mean it now costs £83.14 to fill a 55-litre family car, £3 more than it did at the start of the year and a huge £15 more than a year ago (a rise of 22%).

Drivers of diesel vehicles witnessed even larger increases at the pumps, with a litre going up 4.76p to finish February at 154.75p, a new record high price. This was the seventh largest monthly price increase on record and the biggest since last October (8p). It now costs £85.11 to fully fill a 55-litre diesel car, up from £82.49 at the start of the month and £69.67 a year ago.

The rising pump prices are entirely down to increasing wholesale fuel prices caused by the oil price jumping by $10 in February, ending the month at $103.26. Just four days earlier, oil hit $106.61, its highest level since August 2014.The decision by Russia– the world’s second biggest oil producing nation – to invade Ukraine was primarily to blame for the continued oil price increase but even before the conflict oil output was lagging behind worldwide demand, which is building as the coronavirus pandemic wanes.

Despite the rising prices and the inevitable impact they are having on drivers, especially those on lower incomes, the RAC’s analysis does suggest retailers’ margins which were dramatically inflated at the end of 2021 are now back to more normal levels. During February, the average margin was 8p for each litre of petrol and just under 6p for each litre of diesel, compared to 16p and 12p respectively during December.

RAC fuel spokesman Simon Williams said: “February was undoubtedly a shocking month for drivers. A rise of 4.5p in any month is bad enough but when it takes pump prices to record levels, it’s bound to hurt households across the UK.

“Motorists are having to endure successive months of rising prices and, sadly, it doesn’t look as though February will be the last. While prices were rising due to oil production not being able to keep up with demand as life becomes more normal again, Russia’s invasion of Ukraine caused the barrel price to shoot past the $100 a barrel mark for the first time in nearly eight years making wholesale fuel far more expensive.

“We know from RAC research that eight in 10 drivers would struggle to get by without their cars and that the pandemic has made access to a car even more important than ever, but the exorbitant cost of filling up may force people to cut down on non-essential journeys to save money.”

“The RAC is now calling on the Treasury to look at an emergency, temporary cut in the VAT rate levied on fuel to ease some of the pain drivers are facing and to better protect them from upcoming rises.”

Regional pump prices compared

Find out more about UK petrol and diesel prices on the RAC website.

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It meant drivers paid £156m more than they should have, according to data from RAC Fuel Watch.

Unleaded dropped from 147.47p a litre to 145.48p when the RAC says drivers should have seen prices nearer to 135p, had retailers “played fair” instead of taking far bigger margins than normal. Diesel dropped by just under 2p a litre from 150.80p to 148.92p, when the group says drivers should have been paying around 142p.

Instead of their long-term margin of 6p a litre, retailers took an average of 16p a litre on petrol and 12.5p on diesel in December, the RAC said.

The price of a litre of unleaded on the wholesale market, including delivery, averaged 106p across the month.

“Had a 6p margin been taken drivers would have seen an average petrol pump price of around 135p after applying VAT at 20%. The average wholesale cost of delivered diesel was 112p a litre which, with the usual 6p retailer margin, would have given a pump price of around 142p,” the RAC said.

The group calculated that it cost petrol car drivers £6 more to fill up a typical 55-litre family car than it should have (£80 v £74) and for diesel nearly £4 more with a tank costing £82 at the end of the month instead of £78.

The RAC estimates retailers’ refusal to reflect lower wholesale prices at the pumps cost petrol car drivers a huge £156m in December, or the equivalent of £5m a day.

RAC fuel spokesman Simon Williams said: “December was a rotten month for drivers as they were taken advantage of by retailers who rewrote their pump price strategy, costing motorists millions of pounds as a result.

“Their resistance to cutting prices and to only pass on a fraction of the savings they were making from lower wholesale costs is nothing short of scandalous. The 10p extra retailers have added to their long-term margin of 6p a litre has led to petrol car drivers paying £5m more a day than they previously would have.

“In the past when wholesale prices have dropped retailers have always done the right thing –eventually – and reduced their pump prices. This time they’ve stood strong, taking advantage of all the media talk about ‘higher energy prices’ and banked on the oil price rising again and catching up with their artificially inflated prices, which it has now done.

“The trouble is every extra penny they take as margin leads to drivers paying even more as VAT gets added on top at the end of the forecourt transaction. This means the Treasury’s coffers have been substantially boosted on the back of the retailers’ action. We urge ministers to push retailers into doing the right thing for consumers.

“The only benefit of the current high fuel prices is the extra incentive for drivers to go electric as those driving 9,000 miles a year could save around £1,500. To help drivers afford to make the switch we are offering highly competitive EV leasing deals as well as an excellent value EV home charging tariff which can be fixed until June 2023 and currently costs just 6p per kilowatt hour overnight.”

An analysis of RAC Fuel Watch data reveals Asda had the cheapest petrol at the end of the year with a litre costing an average of 141.81p at their stores, with Sainsbury’s not far behind at 142.57p. Asda also sold the lowest priced diesel at 144.9p a litre ahead of Tesco on 145.8p. The average price of motorway unleaded at the close of December was 160.55p while diesel was higher still at 163.43p.

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The average price of both petrol and diesel hit new record highs before the end of October after spiking by nearly 7.5p and 8p – and have continued to rise since.

Petrol is now 30p a litre more expensive than it was a year ago, with a quarter of the 12-month hike coming in October alone.

The RAC says it has never before recorded a petrol rise of more than 7.5p a litre in one month, since the start of fuel pricing data in 2000. 

The previous biggest petrol price rise in a single month was in May 2018 when a litre went up 6p to 129.41p.

RAC data also shows that petrol prices in Northern Ireland are nearly 3p a litre cheaper than the South East of England.

Cheapest petrol

While Northern Ireland had the cheapest petrol and diesel in the UK, drivers still saw an 8p-a-litre leap in the price of unleaded. 

A litre of diesel in Northern Ireland hit 144.36p – the same as the average price of petrol across the UK, while In the North East diesel rocketed by a ‘frightening’ 9p-a-litre to 147.22p.

On Sunday 24 October, the petrol price in England exceeded the 142.48p-a-litre all-time peak set on 16 April 2012 by reaching 142.94p.  

By the month close, it had reached 144.35p – adding around £4 to the cost of filling an average family car’s fuel tank.   

October prices rose 30p higher than what they were a year ago (114.46p), making it around £16.50 more expensive each time drivers visit the pumps. 

The RAC says the diesel rise of 8.16p last month is second only to a 8.43p jump seen in May 2008. 

Diesel also surpassed its record price of 12 April 2012 (147.93p) on Halloween, with a new high of 147.94p, up from 139.78p on 1 October.

The monthly record jump in petrol prices was primarily as a result of oil becoming more expensive, rising by nearly $5 a barrel from $78.62 to $83.47 – peaking on 25 October at $86.16. 

This caused the wholesale price of a litre of unleaded to go up by 5p and diesel by 4.5p. 

Surging cost of oil

Steve Gooding, director of the RAC Foundation, said: “The surging cost of oil is certainly contributing to the misery drivers face at the pumps, but the price of a barrel is still only around two thirds of what it was when forecourt prices were last at these levels.”

And the motoring body also believes that the rising cost of biofuels has also pushed petrol higher, with filling stations across the UK from September switching to E10 petrol with a 10 per cent biofuel mix, up from 5 per cent E5 sold previously.

RAC Fuel Watch data also shows that the big four supermarkets had a part to play in October’s spike.

They increased the price of unleaded by more than 9p-a-litre and diesel by more than 10p to averages of 142.18p and 145.28p respectively.

Asda had the cheapest petrol at 140.98p, only slightly lower than Sainsbury’s at 141.68p. Sainsbury’s offered the lowest price diesel at 144.37p, just slightly less than Asda which charged 144.57p at the end of October.

RAC fuel spokesman Simon Williams said there was a ‘glimmer of hope’ that prices could stabilise – and that major retailers needed to pass on savings to drivers as quickly as possible.   

“With a fill-up costing £16.50 more than a year ago, the impact is definitely being felt in homes up and down the country. It’s also bound to have a negative effect on the economy,” he said.

“There is, however, a glimmer of hope that the oil price may have peaked for the time being, but much will of course depend on whether more supply is released when oil producer group OPEC+ next meets on Thursday.

“Regardless of this, the profit margin retailers are taking on each litre of petrol is greater now than it used to be prior to the pandemic, which is artificially making forecourt prices higher, particularly as VAT is charged on top. 

“We urge the biggest retailers, in particular, to play fair with drivers and ease the burden at the pumps by lowering their margins on petrol from around 8p a litre to more normal levels.”

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