F&I Management & Training

According to the motoring organisation's latest fuel price report diesel now costs 123.07p a litre, compared to the year high of 123.08 in May

Over the past decade the popularity of diesel powered cars, which offer 15-20 per cent greater fuel efficiency than petrol models, has grown.

Approximately 40 per cent of cars on the road and new models sold have diesel engines.

Diesel is also crucial for the haulage industry and dearer fuel will eventually result in shop prices rising as well.

"Fuel accounts for a third of the cost of running a truck, and it's not as if commercial vehicle operators have the option of using public transport, so increased prices become a real problem for businesses struggling out of dire trading conditions," said a spokesman for the Freight Transport Association.

"With pretty much everything on our shelves having made its journey at one stage or another on a lorry, the impact of higher oil prices and successive, above inflation tax hikes could make it more difficult for the logistics sector to deliver Christmas this year."

However the comparative strength of sterling has provided some respite for motorists by preventing the cost of petrol reaching a new all-time high.

The average price is now 119.08 pence a litre. Had the pound been as weak as it was in May, then drivers would have been paying more than 122 pence a litre - exceeding the current record of 121.61 pence.

Nevertheless petrol is now 10.44 pence a litre more than it was a year ago, meaning that drivers are now paying an extra £5.22 to fill a tank than in November last year.

Edmund King, the AA's president, however. feared that motorists could be hit with dearer fuel in the near future.

"Knife-edge, dread and uncertainty are the words describing the state of UK fuel prices at present," he said.

"The oil price hit a two-year high last week, spurred on by market speculators, before falling back into the $75-$85 range that has set the tone for most of this year. The wholesale petrol price touched $800 a tonne again last week before dipping down once more."

"The stronger pound has shielded drivers and consumers from the worst of these market changes. However, the fallout from next January's increase in fuel duty and higher VAT doesn't bode well for inflation figures and sterling, if this week's market reaction is anything to go by."

"At street level, a steady increase in pump prices, impending higher domestic energy bills, and even reduced reward points for supermarket fuel purchases, add to the sense of dread for the coming months."