New data has revealed that petrol and diesel prices have reached a seven-month high, with fears this could continue following the Budget next week.
The latest figures from the AA show that the average price of a litre of petrol at UK forecourts is now 136.2p, with diesel costing 144.6p.
This is the highest price since March, with drivers potentially facing additional challenges at the pumps in the coming weeks and months.
Chancellor Rachel Reeves will unveil the Government’s Autumn Budget next Wednesday (November 26), with many hoping for clarity on the rate of fuel duty.
Fuel duty has remained frozen since 2011, while a five pence per litre cut has remained in place since 2022 following the Russian invasion of Ukraine.
The AA highlighted that the 5p freeze was “the only factor” keeping fuel prices from soaring, as seen in recent years.
Fuel prices peaked in the summer of 2022, when drivers were paying more than 191p for petrol and almost £2 for diesel.
While prices have fallen significantly since then, drivers are still dealing with costs that are at the highest level since the end of 2021.
Chancellor Rachel Reeves could announce changes to the rate of fuel duty in next week’s Budget
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PA
Data from the Office for National Statistics found that inflation on motoring spending has generated a “huge windfall” in VAT.
The Treasury raked in an extra £1.2billion during 2023 and 2024, almost £3billion more than in 2019.
Jack Cousens, head of roads policy at the AA, described the £24.9billion raised by the Government as a “hidden tax on driving”.
The £24.9billion from additional VAT on motoring spending now matches the income generated from fuel duty on petrol and diesel purchases.
The expert continued, saying: “The recent increase in pump prices has put the national averages for petrol and diesel on a knife-edge that could see them return to the record levels of pre-Covid if the 5p fuel duty cut, introduced in March 2022, is cancelled in this month’s Budget.
“Some of that extra fuel cost is being generated by the persistence of the pump-price postcode lottery, where local rivals match each other’s prices in a cosy relationship that leaves drivers in the ‘wrong’ towns paying £2 to £4 more for a tank of fuel.”
It is hoped that the Government will finalise the rollout of the Fuel Finder tool to help motorists across the UK benefit from cheaper prices.
Fuel Finder will require forecourts and major retailers to publish live fuel prices and confirm the unavailability of fuel within 30 minutes of a change.
The 5p fuel duty cut was introduced in the aftermath of Russia’s invasion of Ukraine in 2022 | PAModelling figures from the Government suggest that drivers could save an average of between one and six pence per litre when filling up once the scheme has been introduced.
A spokesperson from the Department for Energy Security and Net Zero (DESNZ) told GB News that Fuel Finder “is on track”, Parliamentary time providing.
The scheme is likely to be modelled on the Consumer Council’s Fuel Price Checker in Northern Ireland, which shows the average, cheapest and most expensive petrol and diesel costs across the country.
New data from the service shows that drivers are paying as little as 124.9p for petrol and 130.9p for diesel in Dungannon
