UK Diesel Prices Expected to Hit Record Highs Amid Iran Conflict Fallout

Diesel prices in the UK are expected to hit record levels over the weekend as the fallout from the US-Israel war with Iran continues to drive up costs.

The average price of a litre of diesel at the pump stands at 198.32p, according to the RAC motoring body. That's close to the all-time high of 199.09p recorded on 25 June 2022, following Russia's full-scale invasion of Ukraine.

Simon Williams, head of policy at RAC, said the June 2022 high would "almost certainly be surpassed over the weekend as retailers continue to pass on the increases they're seeing when they buy new supply".

Over the past seven months, the Iran war has severely disrupted the production and transportation of wholesale oil across the region, causing the price of fuels made from oil to surge.

Motor fuel prices fell back when the US and Iran agreed in June to a framework deal to end the fighting, but rose again as tensions resurfaced.

Meanwhile, US President Donald Trump has responded to rising diesel prices by mulling a ban on US diesel producers selling overseas, in a move which could push up the UK price even higher.

Crude oil is a key ingredient in petrol and diesel, which means that higher wholesale costs make filling up a car more expensive. The price of petrol and diesel is also heavily influenced by demand and refining capacity.

Analysts say every $10 (£7.44) per barrel increase in the oil price pushes up pump prices by roughly 7p a litre.

Since the war began, the price of a barrel of Brent crude – the global benchmark for wholesale oil prices – has been very volatile.

Generally speaking, news of further conflict drives the price up while hopes of an end to the war pushes the price down.

Before the conflict, Brent was about $70 a barrel, but the fighting saw it peak at above $120.

In early July, after the framework deal was signed, prices fell back to near the $70 a barrel mark.

The price climbed back up again after peace talks collapsed and it is now above $100 a barrel.

Before the war began, the average price of petrol was 132.83p per litre and diesel was 142.38p.

At 198.32p for a litre of diesel, the price is now near a record high.

Meanwhile, petrol has hit an average 173.6p a litre, which is the highest in more than four years but lower than its peak of 191.5p during the summer of 2022.

Williams said: "Sadly for drivers, there appears to be no end in sight to high prices at the pumps."

Because transporting oil is a slow process, price movements in wholesale oil markets take about a fortnight to show at the pump.

Fuel retailers have denied accusations of price gouging during the conflict. The official markets regulator said it had "not seen evidence of retailers actively changing their pricing strategies to take advantage of the crisis".

A government scheme called Fuel Finder, external lets drivers compare the cost of fuel offered by petrol stations across the UK.

In May, the then Prime Minister Sir Keir Starmer said a planned 5p increase in fuel duty due in September would be postponed until the end of December because of the conflict.

RAC has said there is "a very strong case" for leaving fuel duty at its current level, at least until the end of the Parliament.