Diesel tops 2 pounds a litre for the first time

The average price of diesel in the UK has passed 2 pounds a litre for the first time, according to the RAC.

A litre of diesel now costs an average of 200.01p, up from 199.79p a day earlier, beating the previous record of 199.09p set in June 2022, after Russia's invasion of Ukraine. The average price of petrol is 174.71p a litre.

The cost of filling up

It now costs 110.01 pounds to fill a typical 55-litre family car with diesel, 31.70 pounds more than at the end of February. Filling the same car with petrol costs 96.09 pounds, 23.03 pounds more than in February.

Diesel has risen by 57.6p a litre since the start of the war involving Iran on 28 February, when it cost 142.38p.

"No-one wanted to cross"

Simon Williams, the RAC's head of policy, said: "This is a pump price threshold that no-one wanted to cross."

He urged the Government to "step in and ease the burden by lowering fuel duty further or reducing VAT in October's budget". The Budget will be delivered on 28 October.

Petrol prices questioned

The RAC's analysis suggests petrol should be averaging about 170p a litre given wholesale costs, rather than nearly 175p, which it says indicates that some retailers may be balancing their prices across both fuels.

Who is hit hardest

Diesel is used by lorries, vans, buses, taxis, farm machinery and many family cars, so higher prices affect almost everyone through the cost of goods and services. Delivery drivers, tradespeople and people in rural areas who rely on their vehicles are particularly hard hit.

The Midlands Air Ambulance says it is paying around 60 per cent more for fuel than before the conflict.

International action

The G7 group of leading economies agreed on Friday to release up to 100 million barrels of emergency diesel and oil stocks over the next four months, which could help to bring prices down over time.

Tips for drivers

• Compare prices before filling up. Supermarket forecourts are usually cheaper than motorway services.
• Drive smoothly, avoid harsh acceleration and braking, and stick to speed limits.
• Keep tyres at the right pressure and remove unnecessary weight, such as roof boxes.
• Combine short trips, and consider walking, cycling or public transport for local journeys.

Public transport

Buses, trams and trains can be a cheaper alternative for many journeys around Birmingham. The region's Swift card and daily caps on bus fares can help regular travellers control their costs.

Why diesel costs more than petrol

Diesel has become much more expensive than petrol this year because the war involving Iran has disrupted supplies of refined diesel in particular. Europe imports a large share of its diesel, and much of it has traditionally come from the Middle East and, before sanctions, from Russia. When supplies are tight, prices rise quickly.

Fuel duty

Fuel duty is charged at a flat rate per litre, and VAT at 20 per cent is then added on top of the total price, including the duty. That means the Government's VAT receipts rise as pump prices go up. Motoring groups have repeatedly called for a cut in duty or VAT to ease the pressure on drivers, while the Government has to balance that against the cost to the public finances.

Electric vehicles

Record fuel prices have helped drive sales of electric cars, with a record number registered in September. Drivers who can charge at home on an overnight tariff can cut their running costs significantly.