Petrol prices reach new record high

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Warning that costs could top £1.50 a litre as oil prices continue to climb

The price of petrol has hit a new record high - reaching an average of 142.94p per litre on Sunday 24 October.

Soaring oil prices have pushed the prices of unleaded up by 28p per litre over the last 12 months and observers warn that it could keep rising in coming weeks.

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The record price was announced by the RAC’s Fuel Watch services, which tracks the price of petrol and diesel across the UK.

It exceeds the previous high of 142.48p which was recorded in April 2012.

Filling up an average car is now £15 more expensive than in October 2020 Filling up an average car is now £15 more expensive than in October 2020
Filling up an average car is now £15 more expensive than in October 2020 | Shutterstock

Petrol prices have been rising constantly since January as the wholesale price of oil has more than doubled from $40 per barrel a year ago to $85 now.

It is now £15 more expensive to fill up an average family car than in October 2020 and the RAC’s Simon Williams warned that petrol prices could exceed 150p per litre in coming months as analysts predict oil could reach $90 a barrel.

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Alongside rising oil prices, retailers have increased their margins from around 5.5p to 7.5p per litre as they look to make up for lost profits caused by 2020’s lockdown.

The RAC said September’s switch to E10 petrol also played a small part in the increase. Ethanol is more expensive than petrol and the higher ethanol content of the new fuel contributed around a 1p per litre increase. The RAC has warned that with ethanol prices also rising drivers could face even further hikes at the pumps.

Mr Williams repeated the RAC’s call for a temporary cut in VAT on fuel to help those struggling to afford to fuel their cars.

He commented: This is truly a dark day for drivers, and one which we hoped we wouldn’t see again after the high prices of April 2012. This will hurt many household budgets and no doubt have knock-on implications for the wider economy.

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“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.

“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.

“We urge the Government to help ease the burden at the pumps by temporarily reducing VAT and for the biggest retailers to bring the amount they make on every litre of petrol back down to the level it was prior to the pandemic.”

Mr Williams added that, compared with 2012, oil prices were actually lower but global exchange rates, retailer margins and the soaring price of ethanol (80% higher than in 2012) were responsible for this month’s record high.

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