London Daily

Focus on the big picture.
Friday, Oct 30, 2026

Even if you don't drive, you'll pay for the rise in petrol prices

Even if you don't drive, you'll pay for the rise in petrol prices

Were the chancellor to cut duty or VAT on petrol and diesel, he would be looking to claw it back somewhere else, warns Sky's Paul Kelso.

The £100 tank of unleaded petrol is another milestone on the relentless upward path of fuel prices.

Watching the price click in to three figures for the first time will draw the breath of anyone filling the 55-litre tank of a family saloon.

But whichever way you count it, prices have been kicking consumers in the guts for weeks already.

Fuel inflation has been staggering in the last 12 months, with unleaded 37% more expensive than this week a year ago, and diesel 38%.

Drivers who have no option but to use their cars have little choice but to shop around and suck up the latest hit at the pumps. But even if you do not drive - and millions of Britons are not car owners - you will pay a price.

Given the fundamental role of motor fuel in the economy there is simply no avoiding the impact.

The Office for National Statistics estimates fuel prices accounted for 0.7% of April's headline inflation rate of 9%; a back-of-the-envelope calculation suggests further rises mean petrol and diesel could make up 1% of the rate for May, when the figures are released.

Almost everything we use and buy gets to us by road one way and another, and with hauliers now estimating the annual fuel bill for an HGV at £20,000, it is inevitable some of these costs will be passed on.

There is little sign of prices levelling off, much less declining, in the coming weeks. Prices are determined by the wholesale market of crude oil - still around $120-a-barrel - and more immediately refined gasoline and diesel.

These have been exacerbated by the invasion of Ukraine. Prices were high before Russian tanks rolled in, but the conflict has had an immediate and fundamental impact.

Russia is the world's second-largest oil producer but sanctions and pledges by the EU, the UK and other nations to boycott its oil by the end of the year are set to take an estimated 3 million barrels a day out of global markets.

Just as importantly for the current pump price, Russia is also a major source of refined diesel oil. The war is cited by producers as a factor in driving the widening differential with unleaded prices.

And even if crude prices were to fall, retailers will still be selling us the fuel already stored in their tanks by refineries and distributors. These record prices will be passing through the pumps for some time.

Retailers say they have limited scope to cut costs. They cite tight margins and the need to turn a profit to invest in new technologies government is demanding - including the electric vehicle charging network which is crucial to ending reliance on the internal combustion engine.

They also point out that the overnight 5p cut to fuel duty announced in March cost the industry millions as they had already paid the tax on fuel in storage, but could not pass it on to customers.

A tank on an average family car can now cost £100


That may not wash with drivers looking at prices already north of £2 a litre. Ministers have threatened to name-and-shame retailers who do not cut prices, and the business secretary has referred the matter to the Competition and Markets Authority, but they and the industry know there is no way of policing the price at the pump while customers are buying.

What government could do is further cut fuel duty or the 20% VAT rate, which together make up around 45% of the pump price and are delivering a windfall to the Treasury as a consequence of high prices.

As with domestic energy prices this spring, we may be entering the "something must be done" phase of this chapter in the cost-of-living crisis. There is no price cap on fuel to protect consumers but for now there is little sense that the chancellor is feeling the heat on fuel.

Fuel duty is forecast to raise £26bn this year. The question for anyone suggesting that number should be cut is where the revenue will come from instead.

Newsletter

Related Articles

0:00
0:00
Close
Department for Environment, Food and Rural Affairs Implements Strict Water Quality Monitoring Rules Following Severe Rainfall and Flooding
Welsh Government Unveils Comprehensive Regional Housing Strategy to Address Rural Affordability and Homelessness Pressures in Cardiff
Office for National Statistics Reports Slowing Consumer Price Inflation and Steady Retail Performance Across United Kingdom Markets
Northern Ireland First Minister Michelle O'Neill and Deputy First Minister Emma Little-Pengelly Advance Cross-Border Infrastructure Agreement in Belfast
Competition and Markets Authority Launches Formal Investigation Into Artificial Intelligence Partnerships Involving Major Technology Corporations
Scottish First Minister John Swinney Secures Cross-Party Support for Devolved Budget Framework and Renewable Energy Expansion
High Court Rules in Favor of Environmental Campaigners Over Department for Energy Security and Net Zero Licensing Procedures
National Health Service England Announces Major Digital Modernization and Artificial Intelligence Diagnostic Rollout Across Regional Trusts
Bank of England Monetary Policy Committee Signals Cautious Approach to Interest Rate Cuts Amid Persistent Wage Growth and Inflation Pressures
British Prime Minister Keir Starmer and Chancellor Rachel Reeves Outline Strategic Infrastructure Plans to Boost Regional Growth and Private Investment
Water pollution remains high despite £5bn investment
Regional Economic Divergence and Industrial Transformation
Technological Sovereignty and Regulatory Scrutiny
Fiscal Consolidation and Public Service Pressures
Automotive Industry Leadership Warns of Imminent Supply Chain Disruptions Following Recent European Trade Negotiations
High Court Delivers Landmark Ruling Affirming Strict Legal Protections for Corporate Data Privacy Against State Surveillance
Welsh First Minister Eluned Morgan Secures Additional Funding for Regional Transport Infrastructure and Rail Modernization
Scottish First Minister John Swinney Announces Major Green Energy Infrastructure Investment Package for Aberdeen
Department for Work and Pensions Proposes Sweeping Welfare Reforms to Incentivize Long-Term Unemployed Back into Work
Competition and Markets Authority Launches Formal Investigation into Artificial Intelligence Partnerships Involving Major Tech Giants
United Kingdom Foreign Secretary David Lammy Concludes High-Level Strategic Talks in Washington on Middle East Security
National Health Service England Unveils Emergency Winter Resilience Plan to Combat Projected Surge in Emergency Admissions
Bank of England Governor Andrew Bailey Signals Cautious Approach to Interest Rate Cuts Amid Persistent Inflation
British Chancellor Rachel Reeves Finalizes Corporate Tax Overhaul Ahead of Autumn Budget to Fund Public Services
Automotive Manufacturers Urge Government Action as High Energy Costs and Global Supply Chain Disruptions Threaten Production
Metropolitan Police Issue Formal Apology Following Inadvertent Release of Confidential Information During High-Profile Investigation
Scottish Finance Secretary Shona Robison Unveils Devolved Budget Highlighting Housing and Public Service Adjustments
Energy Regulator Office of Gas and Electricity Markets Prepares to Remove Household Gas Standing Charges Following Treasury Mandate
Treasury Confirms Reversal of Planned Cash Individual Savings Account Allowance Reduction Protecting Twenty Thousand Pound Limit
Office for Budget Responsibility Revisions Predict Moderate United Kingdom Economic Growth with Elevated Inflation Pressures
Chancellor John Healey Delivers First Autumn Budget in Parliament Highlighting Temporary Bank Surcharge and Cost-of-Living Support
Met Office Issues Extended Forecast Highlighting Stable High Pressure Weather Patterns Across the United Kingdom
Scottish Finance Secretary Shona Robison Outlines Changes to Tax Thresholds and Residential Property Levies in Edinburgh
Financial Markets and Government Bond Yields Remain Stable Following Muted Reaction to Autumn Budget Measures
Defence Committee Chair Tan Dhesi Criticizes Budget for Delaying Critical Defence Spending Decisions to Next Year
International Monetary Fund Forecasts United Kingdom Economic Growth at One Point Three Percent for Year
Office for Budget Responsibility Assesses Fiscal Headroom Reduced to Fifteen Billion Pounds Following Global Energy Shocks
Chancellor John Healey Delivers First Autumn Budget Introducing Household Energy Support and Bank Tax Hikes
Aberdeen City Council Co-Leader Faces Binding Vote Challenge as Local Councillors Launch High Court Legal Battle
Housebuilding Across Scotland Falls to Eleven-Year Low Despite Government Declarations of a Housing Emergency
Former Prime Minister Gordon Brown Organizes National Innovation Summit in Manchester to Boost Regional Competitiveness
UK Government Faces Mounting Criticism Over Lack of Environmental Consultation During Artificial Intelligence Datacentre Expansion Talks
Greggs Announces Closure of Four Major Manufacturing Facilities Across Britain Resulting in Seven Hundred Forty Job Losses
British Retail Consortium Warns That Cumulative Employment and Regulatory Costs Threaten High Street Price Stability
Lloyds Banking Group Chief Executive Charlie Nunn Warns That Increased Bank Taxes Could Deter Long-Term Economic Investment
Ipsos Polling Reveals Seven in Ten Britons Expect Personal Tax Increases Amid Deep Public Economic Pessimism
Chancellor John Healey Delivers First Autumn Budget in Parliament Amid Tight Fiscal Constraints and Slower Growth Forecasts
United Kingdom Finance Monthly Review Highlights Rising Long-Term Borrowing Costs and Persistent Energy Price Pressures Across British Markets
Royal Marines Pioneer Rapid Autonomous Drone Operations During Major High North Exercise Involving NATO Allies
House of Commons Justice Committee Urges Chancellor to Align Prison and Courts Reform Ambitions With Concrete Budgetary Resources
×