For free real time breaking news alerts sent straight to your inbox sign up to our breaking news emails
Sign up to our free breaking news emails
Fuel bills are at their highest in 18 months with drivers of diesel cars are paying £10 more to fill up a tank and petrol customers are shelling out £8 more.
Petrol has hit £1.17 per litre and diesel £1.20, with both set to rise further over the year, the RAC warned in its latest Fuel Watch report.
Unusually, supermarkets hiked pump prices by the most in December, the RAC found. The big stores normally offer discounts to lure shoppers into buying other goods while they fill up.
Drivers had enjoyed low prices after oil more than halved in price during 2014. Oversupply thanks to shale oil from the United States and a glut of oil from the Opec cartel of producing countries, combined with weak demand in a stuttering global economy had kept prices in a slump.
A barrel of Brent crude dropped to $27 in January last year but has now rebounded to $56 as Opec has slashed production.
Motorists have been hit by an additional squeeze from the pound’s 18 per cent drop against the dollar - oil is priced in the US currency, increasing fuel costs further.
There could be further pain in store after British businesses reported unprecedented price pressures on Thursday. The British Chambers of Commerce said the number of firms expecting to increase prices in the next three months is higher than at any time in 20 years.
RAC fuel spokesman Simon Williams said future fuel prices now depend on the outcome of an international deal on oil production levels currently being thrashed out.
Business news: In pictures
Show all 13
"Russia will be of particular interest as it is currently producing at near record levels.
"We are optimistic that prices will not increase by another 3p a litre in January based on what's going on with oil and wholesale fuel now, but if in the months ahead the barrel price was to get nearer to $60 and the pound was to weaken further then that would be the worst possible combination for motorists.
"Our current forecast for the next two weeks is for petrol to be around the 118p mark and for diesel to go up to around 121p a litre."
Join our commenting forum
Join thought-provoking conversations, follow other Independent readers and see their replies
Join our commenting forum
Join thought-provoking conversations, follow other Independent readers and see their replies