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UK diesel prices reach record high in blow to households and businesses

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UK diesel prices have reached a record high at the pumps a week after petrol prices hit their highest ever level, in a blow to hard-hit households and small businesses.

About 12.5 million diesel-car drivers faced an average price across the UK of 147.94p a litre on 31 October, narrowly surpassing the previous high of 147.93p set on 12 April 2012.

Diesel prices have risen by 30p a litre over the past year, driven higher by a sharp rebound in global oil markets, making a full 55-litre tank £16 more expensive. A 55-litre tank of diesel will now cost about £81, up from £65 a year ago, according to the motoring group RAC.

UK petrol price hits all-time high amid oil market pressureRead more

The record pump price for diesel came one week after the average daily price for a litre of petrol reached a record 142.94p, in what was described as a “truly dark day for drivers”.

Businesses in particular are expected to bear the brunt of the record diesel prices, according to the RAC. The UK has 4.5m vans, most of which run on diesel, and 525,000 heavy goods vehicles.

Simon Williams, a spokesperson for RAC, said although the new record was expected after the historic petrol price highs, it was “still another body blow to drivers and businesses across the country who were already struggling to cope with rising prices”.

“As well as hitting household budgets this will have a knock-on effect on the price we pay for goods and services, as diesel is very much the fuel of business and, as such, will contribute further to inflation,” he added.

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Fears over a cost of living crisis this winter have kept a lid on fuel duty. In last week’s autumn budget statement, Rishi Sunak scrapped plans to introduce a 2.84p hike in fuel duty that was expected to cost drivers up to an extra £66 a car each year.

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Pump prices have climbed steadily in line with global oil market prices, which have more than doubled from about $40 (£29) a barrel a year ago to about $85 in recent weeks because of a sudden rise in post-pandemic energy demand.

“While the price of diesel on the forecourt has primarily shot up due the cost of a barrel of oil doubling in the last year from about $40 to more than $80, the price of biodiesel is now two-and-a-half times what it was 12 months ago,” Williams said.

The global energy supply crisis has also caused gas markets to rocket to record highs, which could lead to historic winter heating bills. Squeezed suppliers have been hit by soaring wholesale prices, while the amount they can charge consumers is limited by the energy cap.

On Monday, Bluegreen Energy, which has 5,900 domestic customers, became the 15th supplier to collapse since early August.

The government hopes to break the UK’s reliance on gas boilers by offering £5,000 grants to help homes switch to electric heat pumps.

But Chris O’Shea, the boss of the British Gas owner Centrica, warned that another 40,000 heating engineers would be needed to meet the government’s ambition to retrofit millions of homes over the next decade. “We do have a real shortage,” he told a side event at the Cop26 conference in Glasgow.

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Global oil prices are expected to continue to rise this year, and many banks have raised their market price forecasts to between $90 and $100 a barrel. Larry Fink, the chairman and chief executive of US investment giant BlackRock, said last week: “We’re looking at a high probability of $100 oil.”