UK petrol prices have climbed to their highest level since the Iran war began, adding fresh pressure to drivers already facing higher running costs. The RAC said the average price of petrol has passed 163p a litre and warned that further rises are still possible if wholesale oil stays expensive.
The conflict has helped push up global oil prices, which feed through into forecourt costs after a delay. Although prices briefly eased after a framework deal was announced in June, they have risen again since peace talks collapsed. Analysts say that movement in the oil market is likely to affect petrol and diesel prices in the UK over the coming weeks.
Wholesale oil prices have driven the rise at the pumps
Petrol and diesel prices in the UK are closely linked to the wholesale cost of oil, because crude oil is a key ingredient in both fuels. That means changes in global energy markets can take around a fortnight to show up at forecourts, rather than appearing immediately.
The RAC said that since the conflict began on 28 February, Brent crude has been highly volatile. It rose from about $70 a barrel before the war to above $120 at its peak, then fell back towards $70 in early July before climbing again after the collapse of peace talks. It is now around $94 a barrel. Analysts say every $10 rise in a barrel of oil can add roughly 7p a litre to pump prices.
Petrol has risen sharply since early July but diesel remains below its record
The RAC said petrol reached an early-July low of 150.59p a litre, before rising to 163.6p a litre now. Diesel was 164.52p a litre in early July and has since increased to 184.99p a litre.
Even so, diesel remains below its peak of 191.54p a litre, which it hit on 15 April. Petrol is also still below the levels seen in the summer of 2022, when Russia’s invasion of Ukraine sent prices higher and petrol reached 191.5p a litre while diesel hit 199p. The current figures show that motorists are feeling the impact, but not yet at the worst levels seen in recent years.
Industry groups say lower prices came quickly, while regulators saw no evidence of profiteering
Simon Williams, the RAC’s head of policy, said that with oil prices still elevated, drivers will “almost certainly start paying noticeably more at the pumps in the coming weeks”. The AA’s head of policy, Luke Bosdet, said the group had been surprised by how quickly prices fell and linked that to the Fuel Finder scheme, which lets drivers compare fuel prices across petrol stations in the UK.
Fuel retailers have denied accusations of price gouging during the conflict. The regulator responsible for the market said it had not seen evidence that retailers were changing pricing strategies to take advantage of the crisis. The government also postponed a planned 5p increase in fuel duty from September to the end of December, after the then prime minister Sir Keir Starmer announced the delay in May.
The Strait of Hormuz disruption has kept oil markets volatile
The war has had a major effect on oil prices because it effectively closed the Strait of Hormuz, one of the world’s most important shipping routes for oil, liquefied natural gas and other goods. About 20% of the world’s oil and liquefied natural gas normally passes through the waterway.
Experts warn that even if a deal is reached to reopen the strait, normal shipping could take time to resume and the wider economic impact may continue for months. The UK is heavily reliant on oil and gas imports, with most supplies coming from the US and Norway. Although some oil comes from the North Sea, much of that is exported for refining elsewhere, leaving UK prices tied closely to the global market.
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