UK fuel prices hit seven-month high as AA warns of ‘hidden tax’ on drivers
Fuel prices have reached the highest level in seven months, figures show.
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The AA said the average price of a litre of petrol at UK forecourts is 136.2p, while diesel costs 144.6p per litre.
The last time either fuel was that expensive was March.
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The AA said the 5p per litre cut in fuel duty introduced in March 2020 - which is worth 6p per litre when VAT is taken into account - is "the only factor" preventing pump prices returning to the highest levels before the coronavirus pandemic and Russia's major invasion of Ukraine.
Before then, the record highs for average UK pump prices stood at 142.5p per litre for petrol and 147.9p per litre for diesel, both in April 2012.
AA analysis of Office for National Statistics data found inflation on motoring spending by consumers has generated a "huge windfall" in VAT, with an extra £1.2 billion collected by the Treasury during 2023 and 2024 combined.
Last year's total was nearly £3 billion more than in 2019, at £24.9 billion.
Jack Cousens, the AA's head of roads policy, said: "At nearly £25 billion a year, the huge VAT haul from consumer spending on motoring is a hidden tax on driving that now matches what the Government gets from fuel duty on petrol and diesel.
"The recent increase in pump prices has put the national averages for petrol and diesel on a knife-edge that could see them return to the record levels of pre-covid if the 5p fuel duty cut, introduced in March 2022, is cancelled in this month's Budget.
"Some of that extra fuel cost is being generated by the persistence of the pump-price postcode lottery, where local rivals match each other's prices in a cosy relationship that leaves drivers in the 'wrong' towns paying £2 to £4 more for a tank of fuel."