Fuel prices 2022: petrol prices soar with cost of holiday from Liverpool Airport less than tank of fuel

The cost of filling an average family car with petrol has hit £100 for the first time as fuel prices continue to soar to record levels.

Prices at the pumps are again reaching new highs, and we are fast approaching a litre of fuel hitting £2.

The RAC has confirmed the average cost of a litre of petrol in the UK has reached 183.16p per litre, while diesel is 188.82p per litre.

But why are prices going up, and how else could you travel on a budget of £100?

Why are petrol and diesel prices on the rise?

A variety of factors affect the price of fuel, including the cost of crude oil, international exchange rates and supply and demand.

The ongoing conflict in Ukraine has also sent fuel prices soaring.

What makes up the price of UK fuel?

The cost of a litre of petrol is broken down into six components: fuel duty, cost of wholesale fuel, VAT, retailer profit and delivery and distribution.

The cost of wholesale petrol to the supplier is the main component and accounts for roughly 44% of the total cost – it is based on the price of raw materials, including crude oil and refining costs.

Fuel duty, set at 52.95p a litre, represents roughly 29% of a litre of petrol.

Value-added tax (VAT) also adds to the cost and accounts for 20 per cent. How much you pay in VAT depends on how much fuel you purchase.

E10 fuel, a biofuel made up of 90% regular unleaded and 10% ethanol, makes up 7% of the cost of one litre of petrol.

The amount retailers receive from the sale of every litre is around 2%.

The cost of distributing and transporting the fuel represents 1% of the total cost.

How else could you travel for £100?

There are many alternative ways of transport, with even a holiday costing less than a full tank of fuel.

You could enjoy a two-night stay in Krakow, Poland, with return flights from Liverpool John Lennon airport, for £76, according to the holiday website Kayak.

If you’d prefer to travel on two wheels, you could purchase a Muddyfox Energy 26 Inch Mountain Bike from House of Fraser for £95 (at the time of writing).

You could also travel across the entire county for two weeks for £83.80 with a Merseytravel ‘trio’ ticket, which covers Rail, bus and Ferry.

The Liverpool e-scooter trial is another way to get around the city for less than a tank of petrol.

Swedish e-scooter operator Voi, offers 24-hour usage in the city at £10 and 30-day usage at £40, allowing users to take more rides at a fixed rate.

Taking this into account, you could ride around the city on an e-scooter for two months for £80, which would be cheaper than filling up the car with fuel.