Record fuel prices ‘may ease soon’ but unleaded passes 160p and diesel hits 170p a litre

The AA has raised hope that the record fuel prices, being hit across the UK daily in the wake of Russia’s invasion of Ukraine, will soon start to ease.

The motoring group reported that average pump costs for a litre of unleaded on Thursday rose from 159.57p the previous day to 161.06p.

Diesel marched upwards too from 167.37p to 170.09p.

But it said that there was evidence that pump costs were reaching their peak – and may fall back.

The AA cited trade figures showing that petrol wholesale costs – that started the week at 75.84p a litre – had dropped to 67.73p.

Those for diesel, the organisation said, stood at 77.34p compared to 89.78p.

That was despite Brent crude oil costs briefly hitting a level of $139 a barrel – a 14-year high – earlier this week as the market digested the implications of a US ban on Russian oil and gas products.

The surge in fuel costs will likely prove a major component of rising inflation this month as the chancellor comes under pressure to offer financial aid to drivers and businesses in the form of fuel tax cuts including VAT – on top of help for households to cope with soaring gas and electricity bills.

Chancellor Rishi Sunak delivers his spring statement ‘mini-budget’ on 23 March.

AA fuel price spokesman Luke Bosdet said: “A slump in the oil price over the past two days has dragged the wholesale cost of petrol and diesel down with it – too late to influence pump prices this weekend but sufficient to offer the hope that pump prices may now level off and hopefully fall somewhat.

“Ironically, motorists rushing to fill up and beat pump price surges the weekend before last may have accelerated pump price rises, as stock turned over faster than normal and higher costs worked their way through to the pump sooner than normal.”

He added: “The squeeze on the finances of families with cars continues but the apocalyptic pump price predictions seem much less likely to happen.

“And, with milder spring weather and longer daylight reducing the fuel consumption of vehicles, it is quite possible that cars getting an extra three miles to the gallon will save the equivalent of 9p a litre at the pump.”