The price of petrol has hit a record high averaging 121.76p per litre. Channel 4 News has been speaking to a rural businessman about the crippling effect of soaring fuel costs.
The AA said the average price of petrol has now overtaken the previous record figure of 121.61p reached on May 12 this year.
If the current prices continue in the New Year prices could reach 125p per litre.
The VAT rise comes into force on January 4 and will add around 2.5p per litre while the fuel duty increase, which starts on January 1, will add roughly 1p per litre.
The extra monthly cost of petrol for a two-car family is £25.23, compared with the start of this year.
“Who knows what the price will be come January 5 2011?” Adrian Tink, RAC
The cost of fuel is far higher in rural areas of Britain.
One garage on Benbecula, off the west coast of Scotland, is charging 137.9p for a litre of unleaded.
Local councillor Peter Carlin, who runs a laundry and dry cleaning business, told Channel 4 News fuel prices are a huge problem: “Here on the islands we’re at our wits end.
“In rural communities nothing is on your doorstep. Whether you’re a teacher or a care worker there are large distances to travel.”
It’s highway robbery. Angus McNeil MP
Councillor Carlin said the constant price rises are threatening the future of rural communities: “Some people on the islands are looking at whether it is viable to carry on with their jobs. Traditional industries don’t know whether it’s possible to continue.
“There is no incentive for young people to stay and start up an island based business. The cost of petrol is just prohibitive.”
Scottish National Party (SNP) Transport Spokesperson and Western Isles MP Angus MacNeil has called for action to introduce a rural fuel discount scheme.
Mr McNeil said: “The impact of sky high fuel bills in remote parts of Scotland was ignored by Labour for a decade. Treasury Ministers must introduce the rural discount scheme they promised without further delay.
“The VAT and duty increase set to take place in the New Year will likely send fuel in parts of my constituency past £1.40 a litre. It’s highway robbery.”
The UK's varying petrol prices
On December 9 there were five garages in UK towns offering petrol for 115.9p per litre:
On average the most expensive places in the UK were charging 133.9p per litre:
AA president Edmund King said: “In the past week, we have seen the average price of petrol shoot up 1.7p a litre across the UK and diesel rise 1.61p.
“It comes at a particularly bad time for drivers who have struggled with appalling winter weather and often seen their fuel drain away while stuck in snow-bound traffic jams.”
The record price has has prompted calls for the Government to step in.
RAC motoring strategist Adrian Tink said: “While the increases this year have been driven by a number of factors, you can’t get away from the fact that we have seen five rises in fuel duty in the past two years – and we’re due another one in January, plus a VAT rise.
“Who knows what the price will be come January 5 2011? An average of 125p per litre is very feasible.
“These increases hit everyone, but it’s the families, small businesses and those in rural areas who get hit hardest.
“If the Government is serious about ending the war on motorists, then for the large majority of drivers that starts at the petrol pumps.
“January’s rise must be cancelled, and the overall issue of the price of petrol in this country needs looking at urgently.”