Pump Prices Hit New Highs
A combination of high taxes and constrained supply continues to push fuel prices ever upwards, with average prices at the pump reaching a dizzying new high, with petroleum selling on average for £1.48 a litre for the first time.
The Automobile Association (AA) has revealed that average vehicle fuel prices over the weekend had hit new highs, with petrol on sale at 148.02 pence a litre, and diesel at 151.57 pence. These are new historic highs, nudging out the previous high at the end of last year.
Vehicle fuel is of course stung by two separate taxes here: fuel duty and VAT. Duty is a flat rate of 58 pence per litre no matter how much the fuel costs, with a 20% VAT then charged on the full amount of the cost-price of the fuel and the duty added. The double-whammy of tax — with duty taxed twice — means there’s an effective minimum price imposed on petrol and diesel by the government, and the lower the pump price, the higher the proportion of the consumer’s spend goes to the taxman.
With prices now at almost £1.50 a litre, taxes account for about half of the price of the fuel.