Petrol soars above £2 a litre in UK as Ukraine war drives up prices

The average cost of petrol in the UK rose by three pence in just one day, reaching a record peak amidst the ongoing war between Russia and Ukraine

RAC is calling on Chancellor Rishi Sunak to step in and cut VAT rates amidst rising petrol prices. (Joe Giddens/PA) (PA Wire)

Petrol prices have reached record highs of over £2 per litre in London on Wednesday as the raging war between Russia and Ukraine drives up fuel costs.

The average price of petrol in the UK reached £1.55 per litre for the first time on Monday and has increased by three pence since then, with further price rises likely.

Russia is the world’s second biggest exporter of crude oil and concerns over the reliability of supply chains amidst ongoing conflict, increasing sanctions against the country and divesting to other suppliers could further shoot up petrol prices.

On Tuesday, the government announced the UK will phase out its imports of Russian oil by the end of the year in response to Vladimir Putin’s invasion of Ukraine.

While the business and energy secretary, Kwasi Kwarteng, confirmed that the phasing out would not be immediate to enable the UK to adapt, Russian imports account for around 8% of the UK’s annual demand.

On Wednesday, drivers in London reported prices of over £2 per litre, with Tuesday’s price average of £1.58 per litre being surpassed in multiple stations around the country this week.

Petrol buyers across the country have shared their concerns online as the prices hit new highs.

RAC fuel spokesman Simon Williams said: “Average fuel prices leapt to new records again on Tuesday, with diesel jumping a huge 3p a litre in a single day to 165.24p a litre while petrol went up 2p to 158.20p. The diesel daily increase was the largest on record since 2000.

“The cost of a filling a 55-litre family car with petrol is now £87 – £7 more than it was at the start of the year. Diesel drivers are even worse off with a tank now costing more than £90 for the first time ever – £8 more than in early January,” he continued.

Rising fuel costs come amidst increasing gas and energy bill prices and peak inflation rates, affecting millions of the UK households.

“Wholesale fuel prices have already risen dramatically this week, so more pump price increases in the coming days are inevitable. Petrol is now certain to top an average of £1.60 a litre this week while diesel will progress very quickly towards £1.70.

The RAC is calling upon Chancellor Rishi Sunak to reduce VAT rates to help drivers and cut petrol costs.

“We continue to call on the Chancellor to help drivers by temporarily cutting VAT to at least 15%,” Mr Williams said.

“As it stands 26p a litre of what drivers are paying on the forecourt is attributable to VAT and that comes on top of 58p a litre in fuel duty. This tax on a tax is causing unbelievable financial pain to drivers which is why we believe Mr Sunak holds the key to easing the burden.”