Drivers and motorists are facing the risk of new 158p per litre charges based on the latest RAC modelling. RAC head of policy Simon Williams said April proved to be a month of two halves for fuel prices.
April Fuel Price Trends
Williams commented: "The first half saw pump prices climb ever higher, with petrol rising nearly 5p to an average of 158.31p on 15 April and diesel by more than 7p to 191.54p. But more positively for drivers, the second half of the month saw them drop back slightly with petrol coming down over a penny and diesel 3p by the end of April."
Interestingly, prices in Northern Ireland reduced more quickly compared to the UK averages, with unleaded coming down by almost 4p and diesel by nearly 10p a litre.
May Outlook
The outlook for the first couple of weeks of May, however, is more ominous. Wholesale petrol and diesel prices jumped by around 5p a litre last week, and are now at their highest since the war began. This hasn't yet been reflected at the pumps - petrol is up by just a fraction of a penny so far this month, and diesel has continued to slowly drift downwards. But if oil prices, and in turn wholesale fuel prices, remain at elevated levels over the coming weeks then future price rises at forecourts is all but inevitable.
Tax Component
The RAC explained: "The total retail price paid at the pump also includes a significant amount of tax – 57.95p per litre in fuel duty and 20% VAT. This means that over 60% of the price we pay at the pump goes direct to the Treasury, which together with car tax and ‘showroom’ tax totals more than £40bn a year."
Government Response
Labour Party and Treasury minister James Murray defended the decision to remove the fuel duty freeze in Parliament at the end of April. He said: "We inherited plans from the previous government that would have seen fuel costs go up for people across the country. We have extended the 5p cut in fuel duty. We have extended the freeze, and that is an important way of helping people with the cost of living right now."
