The average price of petrol increased by 11p a litre in May – the second largest monthly increase ever seen, data from RAC Fuel Watch shows – prompting fears that average prices could rocket to £2 a litre.
A litre of unleaded rose from 162.87p at the start of May to 174.02p by the close. This was less than a penny short of the all-time biggest rise recorded in March when a litre of petrol jumped by 11.61p (151.67p to 163.28p).
The major difference with the May rise, however, is that this happened after the 5p-a-litre duty cut invoked by Chancellor Rishi Sunak on March 23 and, despite this, the cost of a litre has rocketed to yet another record high.
May also saw average diesel prices climb to new heights with a litre going up to 183p, a hike of more than 5p which takes the cost of a complete tank above £100 for the first time ever. A full tank of petrol also hit the landmark cost of £95.
The punitive pump price hike has been driven by oil rising from $106.07 to a late month high of $124.45 (31 May) – a 17 per cent increase, combined with a weaker pound at $1.2 – an important factor as fuel, like oil, is traded in dollars on the wholesale market which can dramatically affect the price retailers pay to buy it.
The average price of a litre of unleaded across the big four supermarkets, which dominate UK fuel retailing, went up nearly 9p from 160.31p at the beginning of May to 169.05p by the end. Diesel increased from 174.18p to 180.38p – a jump of 6p a litre.
On the motorway a litre of petrol closed May at 187.66p, up by nearly 5.5p from 182.19p at the start. Diesel finished the month at 197.71p, up from 192.5p, with the prospect of hitting £2 a litre very real in the near future.
In terms of where prices might head next, the RAC said it expected average petrol prices to hit 185p as a result of the rising cost of oil, with diesel heading towards the 190p mark.
RAC fuel spokesman Simon Williams said: “May has proved to be another horrible month for drivers with the average price of petrol shooting up by 11p a litre. This is the second biggest monthly increase on record and comes despite the 5p-a-litre cut in duty.
“Since Russia invaded Ukraine on February 24 the price petrol has gone up 24p a litre. For diesel the figure is 30p. This means the cost of filling a 55-litre petrol car has gone up by £13, and a diesel one by £16.50. Both of these figures would have been even higher had the Government not cut fuel duty.
“The cost of filling a 55-litre family car with petrol has now topped £98 for the first time in history as a result of a litre hitting a new all-time high of 178.5p on Monday. Diesel also rose to yet another record by reaching 185.2p which takes the cost of a tank to £101.86.
“With analysts predicting that oil will average $135 a barrel for the rest of this year drivers need to brace themselves for average fuel prices rocketing to £2 a litre, which would mean a fill-up would rise to an unbelievable £110.
“The oil price is rising due to increased demand for fuel across the world as China eases its Covid restrictions and America and Europe go into the peak summer driving season. All this combined with a weaker pound at $1.2 means wholesale fuel costs more for retailers to buy. The wholesale price of diesel is fast approaching 160p a litre which, when you add 7p retailer margin and 20 per cent VAT, would take the pump price over the £2 mark.
“We strongly urge the Government to take drastic action to help soften the impact for drivers from these never-before-seen pump prices.”