Drivers have been warned that fuel prices are unlikely to drop any time soon.
Driving is becoming more expensive with the price of petrol continuing, with record highs in the UK.
It was previously reported that UK petrol prices hit 173p as experts predict we are set for another rise after the EU places a ban on Russian oil.
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Updated figures from the RAC show the price of petrol has jumped again to 192.6p, Wales Online reports, as diesel spiked to 186.5p.
It's sparked a warning for motorists that fuel is expected to cost a whopping £2 per litre.
Why are fuel costs so high?
Due to high demand, fuel prices are rising and it has not been helped by Russia's invasion of Ukraine.
Russia is the world's third biggest supplier of oil and companies are now cutting ties with the country.
According to the RAC, how much we pay at the pump is mainly affected by;
- The global price of crude oil
- Supply and demand for crude oil
- Oil refinery production and capacity
- The pound to dollar exchange rate, as refined fuel is sold in US dollars per metric tonne
- distribution costs
- The margin fuel retailers decide to take
- Fuel duty charged by the Government, currently 52.95p a litre
- VAT charged at the end of every forecourt fuel transaction, currently at 20 per cent
Higher oil prices mean higher petrol and diesel prices at the forecourts, but a “significant amount” of what we pay is tax.
A RAC spokesperson said: "The total proportion of tax we pay to the treasury varies depending on the pump price.
"For instance, with fuel at 120p a litre at the pumps, 65 per cent of the cost is tax.
"But at £1 a litre it rises to 75 per ent, meaning 75p in every litre sold goes to the treasury.
"Fuel duty raises more than £26bn a year, which together with VAT charged on fuel, vehicle tax and ‘showroom’ tax totals, means motorists contribute more than £40bn a year to the Government’s coffers.”
Why is diesel now similar in price to petrol?
There is now an influx of cheap diesel from countries like Saudi Arabia and, according to AutoExpress, this has pushed the price of diesel closer to unleaded petrol.
But the magazine states that getting a higher percentage of diesel from Russian than petrol will swing the pendulum the opposite way.
What do the experts say?
Regarding the UK's current situation, there are calls for more to be done to ensure that fuel prices do not spiral further out of control.
Simon Williams, RAC fuel spokesperson, said: “The cost of filling a 55-litre family car with petrol has now topped £98 for the first time in history as a result of a litre hitting a new all-time high of 178.5p on Monday.
"Diesel also rose to yet another record by reaching 185.2p which takes the cost of a tank to £101.86.
“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.
"The oil price is rising due to increased demand for fuel across the world as China eases its Covid restrictions and America and Europe go into the peak summer driving season.
"All this combined with a weaker pound at $1.2 means wholesale fuel costs more for retailers to buy.
"The wholesale price of diesel is fast approaching 160p a litre which, when you add 7p retailer margin and 20 per cent VAT, would take the pump price over the £2 mark.
"We strongly urge the Government to take drastic action to help soften the impact for drivers from these never-before-seen pump prices.”
