Chancellor Rishi Sunak has been urged to cut VAT on fuel as prices reached a record 178.5p a litre on Tuesday morning.
Petrol prices rose by almost 0.6p a litre in just 24 hours. Diesel increased from 182.7p per litre last week to 185.2p.
At almost 180p per litre, the price of filling-up a family car, such as a Ford Focus, now costs on average £93.60, up 15 per cent from three months ago on March 10, when it would have cost an average of £81.12.
Last month the cost of filling up a diesel family car went above the £100 mark for the first time.
In March, the government cut fuel duty by 5p for a year to help with rising costs.
But Tory MP Sir John Redwood on Tuesday accused the Treasury of “ripping us off at the pumps” as the Government takes 57.95p per litre in fuel duty for both petrol and diesel and 20 per cent VAT.
He said the prime minister and chancellor need to implement “VAT cuts and regulatory improvements to increase home production, especially food and energy”.
“The Treasury is ripping us off at the pumps,” he said. “VAT has soared as oil prices rise, taking tax up to 90p a litre at a £1.90 total price.
“The Chancellor should cut the taxes back to what he was expecting to levy, not increasing the damage with higher tax.
“VAT is an inflation machine. We need lower inflation. The Chancellor should cut VAT where it is squeezing us too much.”
Oil prices remain high due to the war in Ukraine and sanctions on Russia. Last week EU leaders agreed to cut 90 per cent of oil imports from Russia by the end of the year in response to Vladimir Putin’s invasion of Ukraine.
Simon Williams, from the RAC, said: “With analysts predicting that oil will average $135 a barrel for the rest of this year 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.”
Last month Mr Sunak announced every household in Britain will receive at least £400 off their gas and electricity bills this winter as part of a £21 billion package to deal with the cost-of-living crisis.
The giveaway is funded by increased borrowing and a £5 billion windfall tax on oil and gas companies.