UK petrol prices hit record highs as Brent crude reaches $86

UK petrol prices hit a new record high in the UK as global oil prices continue to soar, placing further inflationary pressure on hard-pressed Britons already struggling with surging energy costs and a tax rise.

Breakdown specialists the RAC and AA said the average price of petrol hit record high of 142.94p a litre on Sunday, beating the previous all-time high of 142.48p reached in April 2012.

Unleaded petrol has risen 28p in a year, adding £15 to the cost of filling up the average family car.

“This is truly a dark day for drivers, and one which we hoped we wouldn’t see again after the high prices of April 2012,” RAC spokesperson Simon Williams said. “This will hurt many household budgets and no doubt have knock-on implications for the wider economy.”

“The big question now is: where will it stop and what price will petrol hit?” If oil gets to $100 a barrel, we could very easily see the average price climb to 150p a litre," said Williams.

“We urge the government to help ease the burden at the pumps by temporarily reducing VAT and for the biggest retailers to bring the amount they make on every litre of petrol back down to the level it was prior to the pandemic.”

Brent crude has risen around 60% so far this year to $86 a barrel, the highest price since October 2014 as post-pandemic demand increased while supply remains restricted below pre-pandemic levels.

AJ Bell investment director Russ Mould said the last time Brent crude oil traded at $86 a barrel, in November 2010, more than 3,000 oil rigs were active worldwide but only half that figure was drilling and producing now, according to data from Baker Hughes and Refinitiv.

“The global rig count in September was up 42% year-on-year but activity still seems very subdued compared to prior surges in oil and gas prices," Mould said, adding that American output from shale oil and gas fields was not taking up the slack.

"The huge surge in US onshore output that helped keep a lid on oil and gas prices for much of the last decade has fizzled."

Tax makes up 57% of the price at the pump, according to RAC. A temporary tax cut could help ease the burden on household finances at a time when other costs are soaring, it added.

"Those on lower incomes who have to drive to work will seriously struggle to find the extra money for the petrol they so badly need," Williams added.