UK pre-tax fuel no longer cheapest

UK drivers, enduring stubbornly high fuel prices, can no longer count on having Europe's cheapest "pre-tax" petrol.

Much of the price that Britons pay at the pumps is accounted for by tax. But stripping away this tax has meant that until the last three weeks, the UK enjoyed the least expensive petrol.

However, the AA has revealed that Austria is now selling the cheapest pre-tax petrol.

The AA also said that the average price of petrol in the UK is now 138.95p a litre - down 1.26p a litre from mid-September despite a 3p-a-litre cut by supermarket Asda in the last week of last month. Diesel has gone down just 0.86p a litre in the last four weeks and now stands, on average, at 143.74p a litre.

But the AA thinks that petrol prices could fall by as much as 4p a litre in the coming weeks.

The most expensive petrol at the moment is in Northern Ireland, where drivers on average pay 139.4p a litre, while London has the cheapest (138.6p).

Northern Ireland, Scotland and Wales all have the highest diesel prices at present - at 144.1p a litre. The cheapest diesel is to be found in Yorkshire and Humberside at 143.2p a litre.

AA president Edmund King said: "The UK fuel industry's main shield against criticism of high prices has been that it sells the cheapest petrol in Europe before tax. Fuel price regulation established in Austria over the past year has blown a hole in that defence.

"On average, over the past 12 months, petrol prices in Austria were only half a penny more expensive, meaning that they would have wiped the floor with the UK had the euro been slightly stronger against the dollar."

He went on: "Austria's change in fortunes doesn't mean the AA believes the UK should rush headlong into setting an official framework for competitive pricing at the pump. However, it does raise questions as to how well pump pricing in this country serves the interests of the consumer - the fuel price postcode lottery and the summer-long inflated price of diesel being cases in point."