Petrol and diesel prices hit a record high yesterday with it costing £100 to fill an average family car.
The ever increasing prices are causing people to worry about the costs of getting to work. The cost of living crisis is also causing the prices of everything else to go up too, with household energy rocketing and the price of food jumping up.
The RAC warned: “These are unprecedented times in terms of the accelerating cost of forecourt fuel. Sadly, it seems we are still some way from the peak.”
READ MORE: Cheapest places for diesel and petrol as fuel prices hit record highs
But what is causing such drastic rises in the fuel prices and what are the government doing to help? Here is everything you need to know, as reported by The Mirror.
Why have petrol and diesel prices surged?
The main reason is a jump in oil prices, with demand rising sharply as economies around the world emerged from Covid lockdowns. Prices spiked after Russia ’s invasion of Ukraine in March. Russia is the world’s third largest oil producer. At the start of May, oil was trading at $107 a barrel but it is now more than $120.
But why have forecourt prices peaked now?
There are a whole load of factors, including Europe and America entering the summer months when more people are out and about driving. That increased demand comes as the supply of petrol and especially diesel has been impacted by constrained refinery capacity, plus the pound’s exchange rate with the US dollar.
How high will prices go?
There is no way of knowing, with much depending on oil prices and the cost charged for refined products. Plus, any measures taken by the government.
So what can the government do?
The Chancellor already announced a 5p a litre cut in fuel duty, but this has been wiped out by the dramatic rise in pump prices. Some motoring groups wants Rishi Sunak to announce another duty cut or to reduce VAT on fuel.
How likely is the Government to act?
If petrol and diesel prices keep rising, the more chance it will be pressures to do something amid a wider cost of living crisis. The Treasury is also raking in more from higher VAT receipts.
What is happening where you live? Find out by adding your postcode or visit InYourArea
