Fuel at all-time high within days

Fasten your seatbelt, because petrol prices are set to hit an all-time high of 120p per litre over the next few days, the AA is warning.

Thanks to the extra penny of fuel tax which came into effect at midnight yesterday, the 119.7p record set at the peak of the commodities boom in July 2008 is set to be passed, hitting the wallets of drivers across the country.

Petrol is already close to 118p per litre, pushed up particularly rapidly over the last two months by ballooning wholesale prices and the weakness of the pound against the dollar.

British drivers are already smarting. This week's tax rise was the fifth since December 2008 – taking duty from 50.35p to 57.19p per litre, despite the freefalling economy and intense pressure on consumer spending.

Motorists are already cutting back, according to the AA. Petrol sales fell by 9.9 per cent between October and December, with supermarket sales down by a whopping 14.6 per cent, in response to rising prices.

Prior to last month's Budget, fuel tax was scheduled to go up by 3p this week. But the Chancellor staggered the increase – with a further 1p to be added in October, and the rest early next year – to curb incipient inflation.