High taxes and limited supply continue to drive fuel prices up in the U.K., with the average price of petrol (gasoline) ringing up at £1.48 a liter, or $7.60 per U.S. gallon — a historic high.
Average vehicle fuel prices reached these highs over the weekend, according to Britain's Automobile Association, edging out the previous high in November.
''The cost-of-living crisis has been ratcheted up yet another notch, tightening the vice on family spending when it faces other pressures from impending domestic energy cost and tax increases,'' Luke Bosdet, the AA's fuel price spokesman, told The Mirror.
Russian saber rattling along its border with Ukraine and increased demand for energy as the global economy reopens two years after being shuttered are fueling the steady increase in prices, according to The Guardian, with oil trading at highs not seen in years.
''Petrol has unfortunately hit a frightening new high of 148.02p which takes filling a 55-litre family car to an eye-watering £81.41,'' Simon Williams, the Royal Automobile Club's fuel spokesperson, told The Guardian.
''With the oil price teetering on the brink of $100 a barrel and retailers keen to pass on the increase in wholesale fuel quickly, new records could now be set on a daily basis in the coming weeks.''
''The oil price is rising due to tensions between Russia — the world's third-biggest oil producer — and Ukraine, along with oil production remaining out of kilter with demand as the world emerges from the pandemic.'' he added. ''As a result, drivers in the U.K. could be in for an even worse ride as pump prices look certain to go up even more.''
While global factors such as COVID-19 and the Kremlin are having an impact, the biggest factor on fuel prices in the United Kingdom is taxes.
Motorists in the U.K. pay two separate taxes on vehicle fuel: excise duty and value-added tax (VAT). VAT adds 20% to the excise duty as well as to the price of the fuel itself, essentially a tax on a tax.
The Guardian reported that a poll conducted by the AA on 15,335 members found that 43% were cutting back on car use, other consumer spending or both. That figure jumped to 59% among younger drivers and 53% for lower-income motorists.
As prices stand, taxes account for about half the price of fuel. Were prices to drop to £1 per liter, or $5 a gallon, as they did in the early days of the COVID lockdowns, 75% of what the consumer spent would go to the government.
The U.K. phased out liquid gallons — which it previously used — in the 1990s amid a campaign to align the country's measurement system more closely with that of the European Union. Although fuel is now sold in liters, vehicle efficiency is still measured in miles per gallon.
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