AA warns that petrol prices set to rise to record high

Average petrol prices have risen by 2.5 per cent in the last month, up by 3.34p per litre from an average of 132.18p to 135.52p per litre.

The AA warns that fuel prices could reach a new record high by the end of August after seeing the steepest monthly rise since the spring.

This makes the UK the tenth most expensive country in the world to buy petrol. British motorists pay more than double the amount American motorists pay and are charged more than drivers in both France and Germany.

Diesel prices are also on the rise with a 3.19p per litre increase in the last month, up from an average of 137.26p in mid-July to 140.45p per litre.

Diesel now costs 0.13p per litre more than it did 12 months ago. Petrol is just 0.66p per litre cheaper than it was a year ago.

The increase means that it will cost an average two-car family an extra £10 a month to fill up.

The AA warns that UK consumers could face record price highs like they did for six weeks earlier this year. The motoring organisation says it could mean that inflation increases through the rest of this year.

East Anglia is the most expensive region for petrol, with the average price for a litre of unleaded at 136.1p per litre. Yorkshire and Humberside is the cheapest where the average cost is 135p per litre

Inflation unexpectedly increased in July, with the consumer prices index rising to 2.6 per cent from 2.4 per cent in June. This came after consistent falls from inflation’s peak of 5.2 per cent in September 2011.

The AA said that motorists are being partially insulated from even higher prices because of the supermarket price war on petrol.

Fuel prices were at their lowest point this summer on July 1st. The AA reports that UK motorists are now spending £4.85 million a day more on fuel.

Wholesale prices have increased from $90 a barrel in late June to $114 now. Analysts say this is down to market speculation rather than consumer demand. The government says that no decision has been made to release oil stocks but that it is ready to help lower oil prices if necessary.

The government postponed a planned 3p a litre fuel duty increase that was set for the start of August. This has been postponed until January 2013.

The AA's head of public affairs, Paul Watters, said: "Once upon a time, petrol prices would rise heading into the summer, due to higher demand for the motoring season, and then fall away late summer onwards.

"The cost of diesel would then pick up heading into winter as demand for heating oil came into play. These days, demand appears to be increasingly irrelevant – it doesn’t matter how much drivers cut back, the commodity markets always seem to find a reason for pumping up oil and wholesale prices."

“France introduced the first stage of its transaction tax on the financial sector a fortnight ago, with other European countries considering a similar move. The French government hopes that this will curb speculation. UK drivers may have some sympathy.

"Falling pump prices in the UK lasted just 75 days and now they’re heading up at a rate which once again threatens to undermine the Bank of England’s inflation target. In six weeks, £10 has been added to the monthly petrol costs of a two-car family in the UK."