MOTORISTS face further fuel price hikes in the next few days – and another big increase in the spring.
The Government’s planned fuel duty rise added 0.76p on the price of petrol and diesel at the weekend.
And tomorrow – January 4 – the increase in VAT to 20% means pump prices will go up again.
Together, it is expected the increases will add about 4p a litre to the price of fuel on the forecourts.
AA figures showed that yesterday a litre of petrol cost an average of 123.98p a litre, with diesel at 128.20p a litre.
Drivers will get a few months’ respite before the Government fuel price escalator kicks in on April – an increase equivalent to the inflation rate plus 1% – which is forecast to add another 4p to the price at the pumps.
Petrol retailer Chris Stern, of Paddock-based CJ Stern (Oils) Ltd, said: “There is not a lot of good news for motorists in the new year.
“Although the price of crude oil has fallen slightly, it is still above $93 a barrel.”
Mr Stern said most retailers would probably “roll up” the fuel duty and VAT increases and only put up their prices on Tuesday.
“They will absorb the fuel duty over the weekend,” he said. “I don’t see them putting 1p on a litre of fuel today and another 3p on Tuesday.”
Mr Stern said the double whammy meant taxation would account for more than 80% of the price paid at the pumps.
And he added: “Most people are probably unaware of the fuel price escalator, which take effect from April 1.
“Inflation will be rising by then, partly because of the 20% VAT increase, so the April rise could be another 4p a litre.”
The fuel price escalator was introduced by the previous government and will be imposed annually until 2014.
Mr Stern said the week between Christmas and New Year had been busier than usual – as motorists sought to beat the fuel price hikes and travelled to shopping centres to snap up bargains before the VAT rise.
Motoring organisation the AA said the two January increases would add about 3.5p to the cost of a litre of petrol and diesel.
AA figures show that a litre of petrol costs an average of 123.98p with diesel at 128.20p a litre. This time last year, petrol was at 107.74p a litre and diesel 109.46p.
The AA has estimated that motorists – even before the two latest increases – are spending almost £10m more a day nationally on petrol than this time a year ago.
Prof Stephen Glaister, director of the RAC Foundation, said: “It is a bleak mid-winter for motorists with already record petrol prices set to rise significantly with the fuel duty and VAT increases.
“And that won’t be the end of it with more increases in fuel duty already scheduled for April.
“Given that each penny increase in fuel duty raises about an extra £500m for the Exchequer, it is easy to see why the Chancellor is tempted to hike rates.
“But if the nation’s 34m motorists are pushed too far they will drive less and the Treasury could actually see their tax take fall.”
The Freight Transport Association said the January 1 fuel duty rise would leave the freight industry “with a £95m hangover”.