Already at a record, UK petrol price surges the highest in 17 years

The cost of filling up a standard car in the UK, already at an all-time high, surged by the most in 17 years to underscore the inflationary pressures the country faces from soaring fuel bills.

Unleaded petrol jumped by 2.23 pence a liter on Tuesday, the biggest one-day increase since the early 2000s, according to the RAC, a UK motoring organization. That drove it to a fresh high of 180.73 pence (about $8.60 a US gallon) and lifted the cost of filling up a car with a 55-liter tank to £99.40. Diesel also jumped to a new record.

“These are unprecedented times,” said RAC fuel spokesman Simon Williams.  “Sadly, it seems we are still some way from the peak.”

While the price of diesel is heading toward £2 a litre, the cost of wholesale petrol unexpectedly dropped by about 5p a litre on Tuesday, Williams said. If that lower price is maintained in coming days, it could stem the flow of daily record retail prices, he said.

Oil prices surged this year following Russia’s invasion of its neighbor, which led to a number of large companies and countries shunning the nation’s oil. More recently, China’s major cities have been loosening Covid restrictions and the US summer driving season is now underway -- both of which are bullish for demand.

Wholesale prices for gasoline and diesel have risen faster than crude oil since the war began, helped by a bottleneck in the global oil refining system at a time when demand has been recovering from the virus.

Rising fuel costs appear to be taking up a larger share of people’s expenditure in the UK, according to a report from from Barclaycard. Spending on energy and fuel increased 34.5% and 24.8% respectively in May, while outlays at supermarkets fell 2%.

The RAC’s prices are UK averages.