Petrol prices move closer to record in UK

Petrol prices have edged closer to a record high after a 1p-a-litre fuel duty increase came into force.

The rise will take prices from an average of 117.8p a litre to just under 119p – almost up to the record of 119.7p reached in 2008.

The pain could have been even greater if Chancellor Alistair Darling had not decided to introduce the duty rise in three stages – drivers will pay an extra 1p now, a further 1p in October and another 0.76p next January.

The fuel duty rise will mean that petrol has risen by 11p a litre since the start of the year.The RAC said this equated to around £121 extra in fuel costs for the average car.

RAC motoring strategist Adrian Tink said: “Worryingly, it’s now a case of when, rather than if, the record petrol prices will be broken. The Chancellor had the opportunity to give motorists a bit of respite but has only staggered the pain rather than ease it.”

Motorists will also be hit by the “showroom tax” which will mean those buying the most-polluting new models will have to pay higher vehicle excise duty (VED) for the first year.

Those purchasing cars that emit more than 255g of CO2 per one kilometre will have to pay VED of £950 for the first year. However, those buying vehicles emitting less than 130g/km will pay no VED at all in the first 12 months.

VED rates for cars emitting more than 130g/km will vary, with VED reverting to new standard rates after the first year. For cars emitting 121-130g/km, the VED changes equate to a first-year reduction of up to £120 on current rates, or £90 on the new increased rates.

At the top-polluting end of the market, the first-year rate equates to a £545 increase for the first year and a £30 increase for each subsequent year.

Based on the 2009 market, the most popular band, accounting for 19.7% of the market, will be for cars emitting 131-140g/km where motorists will experience a £110 charge.

Source: Press Associaition