Fuel prices drop slightly for first time this month

Average fuel prices have dropped for the first time this month, according to the RAC.

The average cost of a litre of petrol at UK forecourts on Monday was 166.6p, down from 167.0p the day before, according to figures from data firm Experian Catalist.

The price of a litre of diesel fell from an average of 179.0p to 178.7p over the same period.

RAC fuel spokesman Simon Williams said: “Monday marked the first day this month where average fuel prices didn’t reach new record heights.

“Prices steadied with very slight reductions in both petrol and diesel perhaps indicating that retailers may have finished passing on their increased wholesale costs for the time being.”

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He said the delivered wholesale price of petrol currently stands at £1.30 and diesel at £1.48.

“With prices this high before retailer margin and 20% VAT are added it’s clear we are in a tough place when it comes to being able to afford to drive,” he said.

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“This is why it’s crucial the chancellor takes decisive and meaningful action in his spring statement that helps hard-pressed drivers and businesses.”

Chancellor urged to cut fuel duty

Chancellor Rishi Sunak has come under pressure to cut fuel duty to help drivers with prices that have soared since Russia’s invasion of Ukraine.

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Families choosing between food and power

The average price of petrol has increased more than 55% in the last two years, with a comparable increase for diesel, according to figures compiled by the government.

As a result, the average tank of fuel now costs almost £90, up by about £33 compared with May 2020.

Fuel duty is currently imposed at 57.95p per litre for petrol and diesel, with VAT at 20% charged on top of both the duty and the product price.

Reports suggest Mr Sunak could reduce the tax by up to 5p per litre – but the Petrol Retailers Association is among those calling for a greater cut, along with a drop in VAT.

Executive director Gordon Balmer previously urged the government to follow the example of countries like Ireland, where fuel duty has been cut by 17p for petrol and 13p for diesel.

Watch and follow the chancellor’s spring statement on Wednesday from 12.30pm on Sky News.