Petrol prices: Howard Cox calls for cuts to fuel duty
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Average prices at the pumps reached 148.02p per litre on Sunday according to the AA, beating a previous high of 147.72p in November. Meanwhile diesel has reached a new record of 151.57p per litre. AA fuel price spokesman Luke Bosdet commented: “The cost of living crisis has been ratcheted up yet another notch, tightening the vice on family spending when it faces other pressures from impending domestic energy cost and tax increases.” According to surveys by the group 43 percent of motorists are now cutting back on car use, other consumer spending or both due to the rising costs.
This figure rose to over half for younger or lower-income drivers.
According to another motoring group, the RAC, the cost of filling a 55-litre family car would now set drivers back £81.41.
RAC fuel spokesman, Simon Williams warned drivers could also expect new records to be set on a daily basis in the coming weeks.
He explained: “The oil price is rising due to tensions between Russia – the world’s third biggest oil producer – and Ukraine, along with oil production remaining out of kilter with demand as the world emerges from the pandemic.
“As a result drivers in the UK could be in for an even worse ride as pump prices look certain to go up even more.”
Oil prices reached £70.12 ($94.76) a barrel for Brent Crude today with speculation oil will soon pass the $100 threshold.
Victoria Scholar, Head of Investment at interactive investor, predicted: “An invasion of Ukraine would likely push oil prices sharply higher, beyond $100 at a time when the market is already in rally mode driven by an imbalance between demand and supply.”
The RAC noted that retailer margins made on petrol sales had improved in recent months, returning to normal levels of around 7p a litre.
The group has urged the big four supermarkets to “play fair with drivers and not to make a bad situation on the forecourt any worse by upping their margins again.”
As well as oil prices, petrol prices have also been impacted by disruption to supply chains and rising costs in other areas.
Retailers have been keen to point out factors such as rising wage bills and energy costs are feeding into prices at the pump with notable increases last year due to a shortage of delivery drivers.
The soaring cost of petrol and diesel comes at a difficult time for consumers though with many braced for other energy cost rises when Ofgem’s energy price cap is raised in April.
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Typical bills will rise to £1,971 a year while April also sees the introduction of a hike in National Insurance by 1.25 percentage points.
Meanwhile inflation is forecast to peak at 7.25 percent in spring, partly reflecting the rising energy costs.
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