Motorists will pay 2p a litre more for fuel from today, after the government increased taxes.
The move has been slated by opposition MPs and motoring groups, and is part of a series of five scheduled tax hikes - not all motoring related - to raise £10 billion between now and the general election, to help pay for public borrowing.
This 2p a litre hike was delayed from last year because of high oil prices. It will generate £1.3 million a day in additional revenue for the Treasury, according to the AA, and means that the taxman takes 65 per cent of the price of a litre of petrol.
An AA spokesman said: “Fuel is the biggest item on the family shopping list. Either they will have to siphon off other parts of their budget or they will have to reduce their petrol consumption. Neither is good for the prospects of recovery.”
The Conservatives said: “Family budgets are being squeezed yet further.”
The party is consulting on plans for a “fair fuel stabiliser” to replace the current fuel tax regime, so that tax falls when the price rises, and rises when petrol prices fall.
“This would protect the public finances from fluctuations in the international oil price and help families cope with rapid changes in the cost of living,” a spokesman said.
The car scrappage scheme is also scheduled to end before the next election, with the government already signalling that it won't extend the scheme.