The Government is being urged again to temporarily reduce VAT on petrol and diesel after new data showed most of the UK is suffering from record-high unleaded prices.

Just five of the 12 nations and regions of the UK are currently selling petrol for less than the record-high of 142.94p, reached on Sunday 24 October 2021

Just five of the 12 nations and regions of the UK are currently selling petrol for less than the record-high of 142.94p, reached on Sunday 24 October. Those five regions are Scotland, Wales, Northern Ireland, the North East and Yorkshire and the Humber, according to latest RAC Fuel Watch data.

RAC fuel spokesman Simon Williams said: “With oil now at $86 a barrel and retailers taking more margin per litre than they did nine and half years ago, it surely won’t be long before every nation and region of the UK, perhaps apart from Northern Ireland, exceeds the 2012 high petrol price of 142.48p a litre.

“These high prices will be hurting households and businesses everywhere and could have a damaging effect on the economy at a time when it is recovering from the worst impact of the pandemic.”

He added: “We urge the Government to help ease the burden at the pumps by temporarily reducing VAT and for the biggest retailers to bring the amount they make on every litre of petrol back down to the level it was prior to the pandemic.”

The RAC data shows the price of unleaded has rocketed by 28p a litre in a year from 114.5p in October 2020, adding £15 to the cost of filling up a 55-litre family car (£63 to £78.61).

The dramatic hike has been driven primarily by the oil price doubling from around $40 a barrel a year ago to $86 now – but some analysts predict it could hit $90 by the end of the year.

While the jump in the price of oil is main reason for the new record pump price it is not the only factor. September’s switch to greener E10 petrol has also played a part – it’s added around a penny a litre to the cost on the forecourt.

The RAC also said the margin that retailers are taking on every litre sold which is now greater than it was prior to the start of the pandemic.

Since April 2020 retailers have increased their average margin on a litre by 2p from around 5.5p to 7.5p a litre. With volumes sold at the pumps plummeting during the first UK lockdown and remaining lower subsequently retailers, particularly the smaller independent ones, are trying to balance the books.

Fuel duty still makes up the majority of pump prices. It stands at 57.95p a litre, exceeding the combined bio and petrol components which amount to around 50p. VAT currently equates to nearly 24p, but this is applied on top of all other elements of the petrol price including duty and retailer margin.