Fuel prices suffered another huge round of price increases yesterday, bringing diesel ever closer to an average £2 a litre.

Diesel pump prices are “heading inexorably” towards a previously unthinkable average of £2 a litre, according to the RAC

RAC data shows diesel forecourt prices went up by 1.27ppl yesterday, pushing the cost of a full fill-up for an average family car to almost £106. So far this month, diesel has increased by 10p a litre.

RAC’s fuel spokesman Simon Williams said its analysis of wholesale diesel shows pump prices are “heading inexorably” towards a previously unthinkable average of £2 a litre – a threshold that’s already been crossed at motorway services.

He added: “Drivers appear to be up against the wall when it comes to high fuel prices, especially as the pound has lost so much ground on the dollar in the last week which is bad news as fuel is traded in dollars. The oil price too remains stubbornly high at $120 a barrel.”

Petrol pump prices however should begin to slow, according to the RAC’s wholesale price data – but it warns they are still likely to progress towards 189p in the meantime.

Yesterday saw the average petrol pump price jump 1.15ppl, pushing the average price to 186.59 and a full fill-up for an average family car to nearly £103.

New records in the average price of petrol have been set every day for the last month, pushing the price per litre up 21p and adding more than £11 to a tank.

While the Government has now ordered a review into fuel prices, looking at whether the retail fuel market has adversely affected consumer interests, the RAC added that it’s the dramatic rise in wholesale prices that has led to forecourt misery for millions.

And it called on the Government to “act to ease their financial pain”; speaking last week, the organisation said “more radical government intervention was urgently needed, whether that’s in the form of a further reduction in fuel duty or a VAT cut”.

The Petrol Retailers Association (PRA) – which has welcomed the fuel pricing review – has also said that the Government should cut duty “by a much more substantial margin”, just as many other governments of European countries have done, if it wants to help reduce the burden of pump price rises on motorists.

Currently, following the 5p cut in the Spring Statement, duty stands at 52.95p per litre and the Government also adds 20% VAT on the price of fuel, which means it’s gained from substantially higher VAT receipts thanks to the increase in wholesale fuel prices since the Spring Statement. For every 10p that the price rises, the Chancellor claims back an extra 2p in VAT. According to latest data, it’s now raking around £46 in tax from every full tank.