Petrol prices: cost of filling family car hits £100 for the first time

The RAC said it was a “truly dark day” for drivers and Boris Johnson has said that rogue retailers should be “named and shamed”.

Simon Williams, a spokesman for the motoring group, called on the government to do more to tackle rising fuel costs which he said was becoming a “national crisis” for the country’s 32 million motorists.

He said: “In a rising market they [retailers] pass on costs very quickly, and we saw that yesterday and we’ll see it again today – the price will jump, we will probably almost certainly hit £100 of petrol fill-up.”

“We [motoring organisations] all want to see something happen with fuel, we don’t want it to be this high.

“People have a need to drive in this country and what we need really is the chancellor to take action and either further reduce duty or cut VAT because VAT at the moment equates to 30 pence a litre.

“The higher the price goes at wholesale level, the higher the VAT take from the Treasury,” he told Today on BBC Radio 4.

Fuel duty is currently levied at a flat rate of 52p per litre for both petrol and diesel, while VAT at 20 per cent is then charged on both the product price and the duty. Since the government took 5p a litre off fuel duty, the average cost of petrol has risen by 14p a litre, wiping out the benefit to motorists and meaning the government has almost made up the cost of the cut in extra VAT receipts. At present, tax makes up 46 per cent of the cost of petrol.

Ministers are drawing up plans to name and shame retailers who fail to pass on the 5p cut in fuel duty, which was announced by Rishi Sunak in March. The prime minister’s official spokesman said there was continuing concern about the problem.

He said the Competition and Markets Authority had the power to begin an investigation and “transparency” could play a part in enforcing the reduction, adding: “We know that there has been variation in that and we do want to see it passed on at all petrol stations. We are not confident that that is happening across the board.”

The RAC has already declared a “national fuel crisis” after certain stations were found to be selling petrol and diesel for more than £2 a litre.

BP forecourts on the A1 near Sunderland, the M4 near Chippenham, Wiltshire, and the M6 near Burton-in-Kendal, Cumbria, were found to be selling petrol for 202.9p. Analysts estimated the average petrol price would exceed £2 by the summer.

The RAC has also warned that Britain is “some way” from the peak of the fuel crisis, which has resulted from countries and companies cutting ties with Russia, and the weakening of the pound against the dollar.

However, the AA blamed the RAC’s speculation for rising prices. Luke Bosdet, an AA fuel price spokesman, said: “Reckless speculation is leading to rip-off prices at the pump. Yesterday’s 2p-a-litre leap . . . is a huge shock and fuels concern that speculation of a £2 litre just gives the fuel trade licence to pile on extra cost and the misery.”

NHS nurses are paying to work, unions have said, as fuel costs outstrip mileage allowances (Kat Lay writes). Price rises mean the average car now costs about 22p per mile to run. NHS staff can claim 56p per mile for the first 3,500, then 20p per mile. Unions said community staff making home visits average more than 10,000 miles a year.

Under a proposed 3 per cent pay settlement, nurses’ pay would fall by £1,600 in real terms this year, the TUC said. Porters faced a £1,000 real-terms cut, maternity care assistants £1,200 and paramedics up to £2,000, it added.

The NHS Staff Council said last month it would ask ministers for a review of mileage allowances, usually undertaken every six months. However, it warned that there was no prospect of central funding and short-term solutions would have to come from local employers. The GMB union said a £60 per month wear-and-tear payment to staff using their own vehicles had also been cut.

The government said that the 56p per mile was “above HMRC’s approved mileage rate of 45p”.