UK Petrol prices hit an all-time high

  • Petrol prices are the highest they've ever been
  • The cost of diesel is set to overtake previous records soon
  • Inflation won't ease off any time soon

Petrol prices are at a record high

The cost of petrol has hit a record high in the UK, as pump prices continue to rise since the beginning of January 2021. The news comes from the RAC Fuel Watch, from data collected across the country, including wholesale, retail and supermarket pump prices.

The average price of unleaded is 142.9p per litre and diesel is 146.5p. These rises have not been caused by recent fuel shortages, but they won't have helped. They hit the average driver hard – the price of unleaded has increased by 28p a litre since October 2020, adding £15 to the cost of filling up a 55-litre family car,

The price of crude oil is currently $86.09 a barrel, following on from a rise last week, and is closing in on record highs of more than $120 in 2012. The upshot is that if crude oil rises to those levels, they will be reflected in even higher prices, causing more pain for drivers who are already seeing their budgets stretched.

RAC fuel spokesman Simon Williams said: 'This is truly a dark day for drivers, and one which we hoped we wouldn't see again after the high prices of April 2012. This will hurt many household budgets and no doubt have knock-on implications for the wider economy.'

He continued: 'Even though many people aren't driving quite as much as they have in the past due to the pandemic, drivers tell us they are more reliant on their cars now than they have been in years, and many simply don't have a choice but to drive. There's a risk those on lower incomes who have to drive to work will seriously struggle to find the extra money for the petrol they so badly need.'

What this means for you

The last time we had high fuel prices like this, government or market intervention saw resulted in them dropping sharply after sustained growth. However in this case, the situation is unlikely to improve soon, as the cost of crude oil is set to continue going up until at least the end of 2021.

In the UK, government-levied taxes make up 57% of the average retail price for a litre of petrol, according to the RAC, and the prospect of the government dropping fuel duty looks remote.

What this means for you is that you're going to be facing increased fuel bills in the short-to-medium term. Driving more economically will alleviate the pain somewhat, or if you're looking to change your car, look more closely at the fuel consumption figures – or even consider switching to an electric car, which are cheaper for running costs in terms of Miles Per Pound.

For all the latest advice, news and finance deals, sign up to the Parkers newsletter here.

Further reading

>> Car advice on Parkers

>> Why your next car might be bought on an app

>> Find out how much your car is worth with Parkers

It costs £15 more to fill up an average family car than it did a year ago