UK petrol prices have hit a nine-year high amid rising oil costs and the switch to more eco-friendly fuel, the RAC has said. According to figures from the motoring organisation’s Fuel Watch initiative, the average price of unleaded petrol has risen to a level not seen since the autumn of 2012.
The RAC’s data shows the average price of a litre of petrol in the UK has hit 140.22p, the highest level since September 2012. It’s also just 2p per litre cheaper than the record high of April 2012,
That means prices have risen by almost 26p per litre in 12 months, with prices at 114.5p per litre on October 15 2020. That’s an increase of 22 percent in just a year – a rise the RAC attributes to a massive increase in the price of oil. Over the last 12 months, the price of a barrel of oil has doubled from $41 to $83 (£29.83 to £60.39 at current exchange rates).
However, the RAC also says the switch from E5 to E10 petrol has made a difference. The old E5 petrol was five percent ethanol, but the new E10 fuel is 10 percent ethanol – a move designed to make the fuel more eco-friendly. However, it has added around a penny a litre to the price of fuel before VAT is applied.
And VAT itself has made a big difference to prices, even though the 20-percent rate has remained unchanged. But with the rising cost of oil, drivers are now paying 4p more in VAT on a litre of petrol than they were last year. In October 2020, VAT made up around 19p of the cost of a litre of petrol, but that figure now stands at 23p.
“Our data shows we haven’t seen the petrol price at this sort of level since September 2012, and we’re now worryingly close to the all-time average UK price high of 142.48p that was hit in the same year,” said RAC fuel spokesman Simon Williams. “At a time when households and businesses are facing spiralling prices in other areas this is a huge concern.
“While the cost of oil has more than doubled in a year, the price drivers pay at the forecourt is compounded by the fact there is nearly 58p in fuel duty charged on every litre. And, on top of the delivery cost and the retailer’s margin, you’ve then got VAT which currently accounts for 23p a litre – this has added 4p more a litre in just a year."