The RAC has warned that petrol prices are set soar to £1.20 a litre by the end of the year. The organisation said that several facters were to blame, including rising oil prices, the government’s planned fuel duty hike, and the end of the lower rate of VAT. It added this could all lead to a return of the record highs seen at the pumps last summer.
RAC spokesman John Franklin called on the government to scrap the extra fuel duty, due to come into force at the start of next month. He said there had been a steady rise in the price of petrol since the start of year which showed no sign of ending.
He added: "Average petrol prices will soon be 20p a litre more than they were at the start of the year, which adds a whopping £11 to the cost of filling up an average tank. The rising price of oil is certainly a factor in this, however it does seem to be the case that petrol prices rise quickly when oil goes up but fall slowly when the price of oil drops.
"And to add further misery the government will be putting 2.3 pence on the price with the fuel duty increase on 1 September. With the additional increase in December, when VAT reverts back to 17.5%, it’s looking more and more likely that petrol prices could hit last summer’s record highs of 120p a litre. The government really need to take a close look at these planned increases."