Pump prices hit record levels today, piling pressure on the government to cut fuel duty.
Fuel has now passed the previous high seen in the summer of 2008, pushed up by a combination of a near $100 per barrel crude oil value and a succession of tax increases.
Motoring groups described the increased cost of motoring as the "road to misery" as fuel monitoring group Experian Catalist said the average price of a litre of diesel had hit 133.26p and petrol 128.6p.
George Osborne has hinted in recent days that he is considering freezing duties that are due to increase further on 1 April. On Thursday the chancellor said: "We can override it. We are looking at that."
Pressure to cut prices increased when the RAC motoring organisation said it was joining the Fair Fuel UK campaign started by truckers and the Freight Transport Association.
The AA said the new diesel price meant that drivers were paying 19.21p a litre more than a year ago, adding £9.61 to the cost of a typical 50-litre refill. "Hitting a new record for diesel is yet another milestone along a road of misery for drivers," said the AA's president, Edmund King.
The soaring price of petrol can be expected to trigger anger against BP and Shell when they announce big increases in profits next week. US oil group, Chevron, has just reported a 72% increase in fourth-quarter income to $5.3bn.
Today the price of Brent blend oil rose $2 to hit $99.60 per barrel as traders worried that violence in Egypt could spread to other bigger Middle East oil producing countries.
But at the World Economic Forum in Davos the bosses of BP and Shell insisted they were not in favour of a very high crude price because it threatened to slow down economic growth and cut demand.
Soaring fuel prices were among the key reasons behind inflation's sharp rise in December, when the consumer price index (CPI) went up by 3.7%, against 3.3% in November.
On New Year's Day, a government fuel duty increase added 0.76p to petrol and diesel. Three days later, VAT rose from 17.5% to 20%.
There is growing pressure for a rethink on the further 1p-a-litre rise at a time when petrol prices have soared – in part because of the rapid acceleration of the oil price . Brent crude is trading at $97 per barrel.
"We are concerned about the current price of oil. We don't want [economic] recovery slowed," said Shell's chief executive, Peter Voser. The chairman of BP, Carl-Henric Svanberg, said: "If the price continues to rise, this could hurt recovery."
Much depends on the behaviour of oil cartel Opec, which is holding back production to keep prices up. The organisation's secretary general, Abdullah al-Badri, said he was "sure 100%" the market had enough oil. Oil prices are still well below the record of $147.27 hit in July 2008, and analysts predict an average of slightly more than $90 for the year as a whole.
The Fair Fuel UK Campaign is calling for the planned fuel duty rise in April to be scrapped and for the government to look at further ways to stabilise the price.
RAC motoring strategist Adrian Tink said: "Ordinary drivers and businesses are being crippled by the relentless rise in fuel costs. Action must start with the scrapping of April's planned fuel duty rise – the ninth tax rise to affect the price of fuel in a little over two years."
The Freight Transport Association and the Road Haulage Association are backing the Fair Fuel UK campaign, co-ordinated by Peter Carroll, a haulier who orchestrated previous protests, as well as the successful Gurkha Justice Campaign of 2009 with Joanna Lumley. Carroll has previously warned that he would bring the campaign to Whitehall, raising the spectre of a repeat of the road blockades seen in 2008 and 2000. His formal position during this campaign is against direct action.
The Item Club, a respected group of independent economic forecasters, said in a recent report that if oil averaged $100 over the year it would drive up inflation by a further 0.5% "threatening UK economic recovery".
