The cost of filling a family car with petrol was a third higher in March than it was a year ago, while a diesel car cost 40% more – and the chancellor’s 5p fuel duty cut has done little to help.
That is the verdict from RAC’s Fuel Watch, which found that the average litre of unleaded petrol reached 167.3p on 22 March – a record high.
A record was also set by the 11.62p per litre increase seen in unleaded petrol during the month – the largest increase recorded by the RAC in a single month since monitoring began in 2000.
The previous biggest rise was in October last year, when petrol prices rose by 7.43p a litre.
Diesel car drivers faced even bigger increases – the average price rocketed by 22.06p per litre, peaking at 179.9p on 23 March.
AdvertisementThat was an increase three times the size of that seen in May 2008, previously the worst month, when the cost increased by 8.43p.
Rising wholesale fuel costs are to blame, made worse by a rise in the cost of oil following the Russian invasion of Ukraine – a barrel cost $112.99 at the beginning of March before hitting a 14-year high of $137.72 on 8 March.
More from BusinessThe price fell to $109.98 by the end of March but the earlier rises had already pushed up wholesale prices by then.
3:23 Will high petrol prices spark a green revolution?The chancellor’s 5p cut in fuel duty made little difference, the RAC said, as it came on a day when the oil price jumped by $6 a barrel.
Since Rishi Sunak’s address to the Commons, average petrol and diesel prices have fallen by just 3.73p and 2.61p respectively.
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RAC fuel spokesman Simon Williams said: “Drivers might well be feeling aggrieved that the chancellor’s ‘historic’ fuel duty cut announced in the Spring Statement just two weeks ago has done nothing to protect them from price increases.
“A 5p cut in duty should, in theory, have led to a 6p cut in prices at the pumps as a result of the government taking less VAT, but that is on the basis that wholesale prices stay still – which is hardly ever the case – and retailers passing on their reduced costs to drivers fairly.
“The fact pump prices have fallen so little reflects the fact that the cost to retailers of buying fuel had been going up ahead of the Spring Statement.
“Had the chancellor temporarily cut VAT rather than fuel duty on fuel, as we asked him to do, the impact on pump prices would have been immediate with drivers benefitting straight away.
“Cutting VAT would also have gone some way towards shielding drivers from future increases – something a cut in duty just can’t do.”