The price of petrol at UK forecourts has made its biggest daily jump in 17 years, as the cost of filling a family car threatens to exceed £100 for the first time.
A litre of petrol cost an average of 180.73p on Tuesday, according to the data firm Experian Catalist – up an astonishing 2.23p compared with the previous day.
A similar increase on Wednesday would break the £100 barrier for the average cost of filling a tank for a 55-litre family car.
Some forecourts are already selling petrol above £2 a litre, including a BP garage on the A1 near Sunderland, which is charging 202.9p.
Average diesel prices are also at a record high, hitting 186.6p on Tuesday, up 1.4p from Monday. The increased price of diesel has a significant impact on the wider economy because businesses typically use the fuel to fill vans and lorries.
The increase in prices has been blamed on increased demand for fuel across the world, including in China and the US as Covid restrictions loosen.
A squeeze on capacity at refineries has also kept pump prices high while oil has fallen from peaks seen at the start of the war in Ukraine.
The RAC this week urged the government to make a “radical intervention” to cushion the cost at the pumps.
However, the AA hit out at the RAC over the comments, blaming “reckless speculation” for rising fuel prices in a surprise spat between Britain’s two main motoring bodies.
The AA’s Luke Bosdet said: “Reckless speculation is leading to rip-off prices at the pump. Yesterday’s more than 2p-a-litre leap in average UK petrol prices is a huge shock and fuels concern that speculation of a £2 litre just gives the fuel trade licence to pile on extra cost and the misery.”
A spokesman for the RAC rebutted the accusation, arguing that retailers were basing their prices on wholesale costs rather than speculation.
The chancellor, Rishi Sunak, cut fuel duty by 5p a litre in his spring statement in March. However, fuel retailers have been accused of not passing on the cut to consumers.
The business secretary, Kwasi Kwarteng, wrote to forecourt retailers last month “to remind them of their responsibilities” to pass on tax cuts to motorists.
He said it was “unacceptable that different locations even within the same retail chain have widely different prices”.
He has asked the Competition and Markets Authority to examine the issue. The prime minister’s official spokesperson said: “The CMA have said that if they find evidence that the cut is not being passed on that would mean competition is not working and they could launch a formal investigation. Obviously we would wholeheartedly support them.
“We are continuing to look at all possible options. Transparency may have an important role to play.”
