The Government is being urged to cut the VAT levied on petrol and diesel as pump prices continue to set new record highs.

The average price of petrol yesterday (Wednesday, March 2) topped 152p a litre for the first time ever and diesel also reached another record price at 155.79p and will very soon exceed 156p.

RAC fuel spokesman Simon Williams said: “What drivers pay at the pumps in the UK is determined by the cost of oil and the exchange rate as fuel, like oil, is traded in dollars. So with the barrel soaring past $117 to hit a nine-year high and the pound only worth $1.33 further price rises are inevitable in the coming days and weeks.”

The decision by Russia– the world’s second biggest oil producing nation – to invade Ukraine is primarily to blame for the continued oil price increase but even before the conflict oil output was lagging behind worldwide demand, which is building as the coronavirus pandemic wanes.

Despite the rising prices, the RAC analysis does suggest retailers’ margins which were dramatically inflated at the end of 2021 are now back to more normal levels.

During February, the average margin was 8p for each litre of petrol and just under 6p for each litre of diesel, compared to 16p and 12p respectively during December.

“While prices were rising due to oil production not being able to keep up with demand as life becomes more normal again, Russia’s invasion of Ukraine caused the barrel price to shoot past the $100 a barrel mark for the first time in nearly eight years making wholesale fuel far more expensive,” said Williams.

“The RAC is now calling on the Treasury to look at an emergency, temporary cut in the VAT rate levied on fuel to ease some of the pain drivers are facing and to better protect them from upcoming rises.”

Fleet News has teamed up with Allstar to bring you the fuel prices locator, enabling you to compare fuel prices and find the cheapest petrol or diesel in your area.

Even one penny per litre can make all the difference when filling up your fleet vehicles, potentially saving your company thousands of pounds a year.

Average pence per litre and per gallon petrol and diesel fuel prices in the UK regions includes England, Scotland, Wales and Northern Ireland. To access the latest fuel prices, click here.