Petrol prices jump 4p ahead of tax hike

Average petrol prices have risen 4p a litre in the past four weeks, taking them to the highest level since July 2008, the AA said today.

With a "trinity" of increases due in the next few days, the average could rise to a record 124p a litre just after Easter, the AA added.

Its latest figures showed the average price of a litre of petrol has risen from 112.10p in mid-February to 116.09p now - with 3p of the rise coming in the last two weeks.

The price of diesel has risen from 113.84p a litre in mid-February to 116.87p a litre now.

The 4p increase in petrol prices has added £2 to the cost of filling a typical 50-litre petrol tank and added £8.49 to the monthly cost of fuel for a family with two petrol cars.

AA president Edmund King said: "With Easter approaching, a new trinity of wholesale price rises, fuel duty increase and lost biofuel subsidy will descend on UK drivers to make sure that any bank holiday motoring fun and relaxation will be tempered by a steep rise in the cost of refuelling."

The AA said that if the rise in petrol wholesale prices - from around 680 US dollars a tonne a month ago to approaching 800 dollars now - is passed on to the pump, the resulting extra 4p increase would lift prices above the all-time high of 119.7p a litre reached in July 2008.

A 3p increase in fuel duty and VAT on April 1, together with another 1p rise from the loss of the subsidy on biofuel due the same day, could lift the price of petrol to 124p a litre.

That overall 8p increase on the current pump price would increase the monthly fuel spend for a family with two petrol cars from £246.50 to £263.30.

Across the regions, Yorkshire and Humberside continues to be the cheapest area for petrol (115.0p a litre) and for diesel (115.9p).

London (116.7p) currently has the most expensive petrol with Northern Ireland being the dearest for diesel (117.6p).

Mr King said: "If price increases turn out as badly as we fear, they will become an important issue in the coming general election.

"The AA has 15 million members, including families, people on fixed incomes, lower wage-earners who rely on cars to get to where they can find work, young drivers who can only afford to stay at home and have to drive to their first job, volunteer drivers and many other types.

"The 'AA voter' will be tuned into what the political parties have to say about record fuel prices and their impact."

RAC motoring strategist Adrian Tink said: "Motorists have faced unprecedented tax rises since the end of 2008, which has helped take petrol prices back towards the 120p a litre mark.

"At last year's Budget, the Chancellor said that he would monitor oil prices before confirming fuel duty rises. We hope he looks back on that statement and defers the next fuel duty increase to help prevent prices escalating towards the £6 a gallon mark (131.9p a litre).

"Also, we would like to see oil companies provide greater transparency in the wholesale price so that motorists fully understand why such increases happen. The current petrol prices are damaging for families, business and the economy."