Cost of living: Diesel hits new record high and petrol is not far behind, AA warns | Business News

The average price of a litre of diesel has hit a new record high, according to industry data, signalling further financial pressure on households and businesses alike amid the deteriorating cost of living crisis.

Motoring group the AA said petrol costs were also now just 1p a litre shy of striking their highest ever level as it revealed the latest set of figures showing prices at levels last seen in March, before action from the chancellor to help bring down pump costs.

Data from Experian Catalist showed the average diesel price at 180.29p on Sunday.

That was up from the 179.9p seen on the day of the spring statement by Rishi Sunak, which cut fuel duty by 5p a litre for a year.

Average pump prices reached 166.65p a litre for petrol at the weekend, just shy of the 167.3p seen on 22 March.

The diesel price is particularly important as it is the backbone of the UK economy, the fuel of choice for vans and lorries, despite being public enemy number one in the battle against climate change.

While rising prices add to inflationary pressures for motorists, it erases margins by adding to costs for businesses – costs that are then likely to be passed on in the supply chain.

Another motoring group, the RAC, said the new diesel record reflected UK actions to punish Russia for its war in Ukraine.

Fuel spokesperson Simon Williams said: “Efforts to move away from importing Russian diesel have led to a tightening of supply and pushed up the price retailers pay for diesel.

“While the wholesale price has eased in the last few days this is likely to be temporary, especially if the EU agrees to ban imports of Russian oil.

“Unfortunately, drivers with diesel vehicles need to brace themselves for yet more pain at the pumps.

“Had Mr Sunak reduced VAT to 15% as we call on him to do instead of cutting duty by 5p, drivers of diesel vehicles would be around 2p a litre better off, or £1 for every full tank.

“As it is, drivers are still paying 27p VAT on petrol and 29p on diesel, which is just the same as before the spring statement.”