Local experts have said prices are as high as they have ever been, with the most recent island-wide petrol average topping out at 140.9 pence per litre and 142.5ppl for diesel.
However, Guernsey motorists are still paying less than the UK average, which has reached 146.9ppl for petrol and 150.4 for diesel.
Robert Cornelius, general manager at Forest Road Garage and president of the Guernsey Motor Trade Association, said the global price of oil was the key driver, while additional fuel duty imposed by the States has added to the increase locally.
A barrel of Brent crude oil, the product eventually refined into petrol and diesel, cost approximately £61.28 per barrel last week, whereas the 2019 average was £47.66.
‘There’s no denying the cost of fuel and oil has gone up since 2019,’ said Mr Cornelius.
The RAC reported that prices have been increasing steadily since mid-2020, when prices were significantly lower than average due to the pandemic.
However, prices around the world and throughout Guernsey and the UK have since rebounded and surpassed previous highs from April 2012 when a litre of petrol cost 142.48ppl on average.
Although Guernsey’s average fuel prices are lower than the UK, Mr Cornelius said the island has its own challenges with fuel duty charges.
Fuel duty in Guernsey is difficult to directly compare with Jersey and UK because of differences in the taxation system. While Guernsey charges a flat rate fuel duty per litre, the UK and Jersey have a baseline fuel duty, and then GST/VAT is added to the final sale price.
The current fuel duty in Guernsey is 73.4ppl.
In Jersey, the current fuel duty is 58.8ppl, plus 5% GST on the overall price. In the UK, fuel duty is 58ppl, and 20% VAT is added.
RAC reported that the UK takes 82.4p in tax from a litre of petrol costing 146.88 pence, while Jersey would take approximately 65p in tax from a litre costing 134.3pence.
However, the UK also charges an annual road tax per vehicle.
The first year of road tax is based on carbon emissions. There the standard yearly rate is £155.
Jersey does not charge an annual road tax, and since 2008, neither has Guernsey.
Since 2008, the States of Guernsey has increased fuel duty year on year.
Starting 1 January, the duty will be raised by 2.9ppl to 76.3ppl total.
Since 2019, fuel duty has increased from approximately 70.1ppl.
Since 2008, it has increased by approximately 48ppl.
In Jersey, fuel duty has also increased. In 2019, Jersey’s fuel duty was 51ppl.
In 2022, it will increase to approximately 63.8ppl.
In the UK, it has been frozen at 58ppl for more than a decade.
The future of fuel prices around the world and in Guernsey is dependent upon many factors, many outside local control.
Mr Cornelius said he did not anticipate prices falling in the near future, but he said prices seem to have stabilised for the time being.
In the meantime, he said, the States should take a hard look at the future of fuel duties because as the island transitions to green vehicles and fuels, tax revenues from traditional fossil fuels will continue to fall.
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