Petrol prices hit all-time high

With petrol prices in the UK higher now than ever before – and heading towards £1.50 a litre – we look at the reasons why fuel has become so expensive...

UK fuel prices set to rise

From long queues and panic buying during the fuel shortage to soaring prices at the pumps, filling up has been a headache for drivers this year. With the average cost of a litre of petrol hitting an all-time high, that shows no sign of changing.

Data from RAC Fuel Watch shows the average price recently hit 142.94p per litre, breaking a record that dated back to 2012.

A combination of factors lies behind this. For starters, the price of oil has more than doubled in the past year, from $40 (£29) a barrel to around $85 (£61) now.

The introduction of E10 petrol, designed to reduce emissions, has also played a part, with the cost of the ethanol that makes up 10% of the fuel (hence the 'E' in the name) increasing by 52% since September.

E10 biofuels fuel filling station labels

As a result, analysts are warning that the price of petrol could reach a new high of £1.50 per litre by the end of the year.

Simon Williams, fuel spokesman for RAC, said: “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. It will hurt many household budgets and no doubt have knock-on implications for the wider economy."

In last week’s Autumn Budget, Chancellor Rishi Sunak announced that a planned rise in fuel duty for next year has been scrapped. It’s the 12th year in a row that duty has been frozen at 57.95p per litre.

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