UK Fuel Costs: Why Petrol and Diesel Prices Are Rising

Motorists across the United Kingdom are grappling with escalating fuel expenses following the outbreak of hostilities between the US, Israel, and Iran, which commenced on 28 February. This geopolitical conflict has severely hampered energy production and logistics throughout the Middle East. The RAC motoring organization has cautioned that pump prices may continue to climb unless a diplomatic solution is reached.

The Link Between Crude Oil and Pump Prices

Crude oil serves as a fundamental component in the manufacturing of both petrol and diesel. Consequently, surges in wholesale oil costs directly translate to higher prices for consumers at the forecourt. Financial analysts estimate that for every $10 (£7.53) rise in the price of oil, the cost at the pump increases by approximately 7p per litre.

Since the conflict began, Brent crude—the primary global benchmark for wholesale oil—has exhibited extreme volatility. Prices spiked from $73 to as high as $126 per barrel, marking the highest levels recorded since Russia’s full-scale invasion of Ukraine. These fluctuations have significantly impacted household budgets: filling a standard family car with petrol now costs roughly £14 more than before, while a full tank of diesel has become £27 pricier.

Current Price Trends

As of 19 May, the price of unleaded petrol hit 158.5p per litre, its peak since the war started, while diesel reached 185.9p per litre. Although prices peaked in mid-April before experiencing a temporary decline, they have since resumed their upward trajectory. The RAC anticipates that petrol prices will likely exceed 160p per litre in the coming weeks, barring a "dramatic and sustained drop" in global oil costs. The outlook for diesel drivers is viewed as slightly more favorable.

Despite these increases, current fuel rates remain substantially lower than the peaks observed in the summer of 2022, during which petrol touched 191.5p per litre and diesel reached 199p. It is important to note that due to the logistical delays involved in transporting oil, wholesale market fluctuations typically take about two weeks to be reflected in retail pump prices.

Investigation into Price Gouging and Government Response

Fuel retailers have rejected allegations of price gouging amid the crisis. The official market regulator conducted an investigation into these claims and concluded that there was no evidence suggesting retailers were manipulating pricing strategies to exploit the situation. To assist drivers in managing costs, the government’s Fuel Finder tool allows motorists to compare fuel prices at stations nationwide.

In response to the economic pressure, Prime Minister Sir Keir Starmer announced on 20 May that a scheduled 5p increase in fuel duty, originally set for September, would be delayed until 31 December. This duty had been frozen since a 5p cut was initially implemented in 2022. Additionally, the duty on red diesel, utilized by the agricultural and rail freight sectors, will be reduced by more than one-third starting 16 June and lasting until the end of the year. Hauliers will also benefit from a 12-month exemption from HGV vehicle excise duty.

Geopolitical Factors and Future Outlook

The primary determinant for future wholesale oil prices is the status of the Strait of Hormuz. Normally, approximately 20% of the world’s oil and liquefied natural gas flows through this strategic waterway. However, the strait has been effectively blocked since the war began. Although a ceasefire between the US/Israel and Iran took effect on 8 April and has largely held, attempts to negotiate a long-term peace agreement have stalled, with control of the strait remaining a key point of contention.

Data from BBC Verify indicates that only a few vessels have transited the Strait since the conflict started, a stark contrast to the normal daily average of 138 ships. While oil prices dropped following the ceasefire announcement, they have surged recently as efforts to reopen the passage have failed. Furthermore, damage to oil and gas infrastructure across the Gulf has severely disrupted refining capabilities.

Looking ahead, investment bank JP Morgan projects that global oil prices will likely stay above $100 per barrel for the remainder of the year, even if restrictions on the Strait are lifted.

UK Energy Imports

The United Kingdom remains heavily dependent on imported oil and gas. The majority of these supplies are sourced from the United States and Norway.

Source: BBC News Generated at: 2026-06-01 11:31:52 UTC