The RAC has released its weekly figures that show fuel prices are now higher than ever before having toppled the previous record from April 2012.
It’s now £15 more expensive to fill up an average family car according to the RAC and, with many analysts saying the oil price could rise further still, it doesn’t look like we’ve quite reached the top of the hill.
But it isn’t just the oil price that’s proving to be an issue. We’re now very unlikely to see prices ever come down to the 110p – 115p we saw this time last year as retailers have increased their profit margins by 2p a litre from around 5.5p in April last year to 7.5p a litre to make up for the Covid shortfall.
The RAC said retailers, particularly the smaller, independent ones, were trying to rebuild their profits after the steep fall in sales prompted by the first UK lockdown in spring last year.
And with the introduction of E10 fuel, the ethanol component of unleaded petrol was doubled to 10% in a bid to lessen our impact on the environment. As ethanol is more expensive than petrol, that change has added an additional 1p per litre.
The DfT has estimated bringing in the new E10 fuel could cut carbon emissions by 750,000 tonnes a year, the equivalent of taking 350,000 cars off the road.
So where does your pump money go?
Duty paid on fuel is currently 57.95p a litre, more than the cost of the combined bio and petrol components, which amount to around 50p.
VAT, currently around 24p a litre, is applied on top of all other elements of the petrol price, including duty and the retailer's profit margin.