Pump prices soar by four times the rate of inflation

MOTORISTS face paying £2 per litre for diesel, experts have warned, as pump prices rally at four times the rate of inflation.

Diesel hit a record average 185.2p per litre on Monday, while petrol hit an all-time high of 178.5p per litre, as crude prices climb amid Russia’s war on Ukraine.

It compares to 132.38p per litre for diesel and 128.69p per litre for petrol at the start of June last year – annual increases of almost 40pc.

The overall rate of inflation up to the end of April is 9pc, triggering the worst cost of living squeeze in a generation.

Filling a 55-litre car with petrol now costs £98.18 on average and diesel now costs £101.86, the RAC said, prompting calls for government intervention.

Simon Williams, fuel spokesman at the RAC, said the wholesale price of diesel is “fast approaching” 160p per litre,

‘Drivers need to brace for fuel prices rocketing to £2 a litre, meaning a fill-up will rise to an unbelievable £110’

implying pump prices above £2 once retailers’ margins and VAT are added.

Brent crude was trading at $119.07 per barrel yesterday, but analysts at Goldman Sachs predict it could average $135 per barrel for the rest of this year until mid-2023.

Oil supplies are under pressure as countries shun Russian reserves due to its attack on Ukraine, and demand in China recovers from Covid lockdowns.

A weaker pound also makes fuel more expensive for UK retailers to buy, as refined fuel is sold in US dollars.

Mr Williams said: “Drivers need to brace themselves for average fuel prices rocketing to £2 a litre, which would mean a fill-up would rise to an unbelievable £110.

“We strongly urge the Government to take drastic action to help soften the impact for drivers from these never before-seen pump prices.”

The Treasury cut fuel duty by 5p per litre in March as it tries to tackle the cost of living squeeze.

But the RAC says it needs to go further and either cut fuel duty again by a larger amount, or cut VAT, which is currently charged at 20pc on fuel.

Responding last week to rising fuel prices, the Government flagged support it is giving to households to help pay their household energy bills, including the most vulnerable families getting £1,200 in direct payments this year.