Drivers in the UK are grappling with rising petrol and diesel prices at the pump as conflict in the Middle East continues to hit economies worldwide.
The rise has been fuelled by a spike in oil prices, which have soared to $117 after Iran hit the world’s largest liquefied natural gas facility in Qatar in retaliation for attacks on its own oil fields.
This is the highest since June 2022 when oil prices peaked at $119 during the Ukraine war. The cost of oil has a significant effect on the cost of wholesale fuel.
Petrol and diesel prices hit their highest in nearly three years this week, latest data shows, increasing by between 9.8p and 20.3p per litre since Saturday 28 February, when the US launched strikes on Iran.
On average, drivers can now expect 142.62p per litre of unleaded petrol and 162.66p per litre of diesel at the pump, according to data from the RAC.
This means the cost of filling up a 55-litre family diesel car has increased by as much as £11.16 in just over two weeks, with further price rises expected.
The rate had already been at a seven-month high before the salvos, but remained at $73 a barrel before the outbreak of the warfare.
Conflict spread across the Middle East after the US and Israel carried out strikes on Iran in February, which were followed by retaliatory Iranian attacks on targets in the United Arab Emirates (UAE), Qatar, Bahrain, Jordan and Iraq.
Blasts continue to be reported across the region, as America and Israel continue airstrikes on Iranian targets. As fighting escalates, Iran has warned that it will “set fire” to any ships trying to pass through the Strait of Hormuz.
The strait provides the only passage from the Persian Gulf to the open ocean, making it a crucial point for the oil industry. Around 20 per cent of the world’s gas and oil is shipped through the waterway, with the Iranian threat proving highly damaging for global trade.
In light of the situation, AA president Edmund King has urged UK motorists to consider cutting out “non-essential journeys” as fuel prices rise.
He said: “The longer this conflict goes on, the more effect it will have on the cost of oil.
“Any time Brent Crude passes 100 dollars per barrel raises concern across the markets, for the haulage industry and drivers.
Analysis of the historic link between oil and fuel prices by think tank the Energy and Climate Intelligence Unit shows oil trading at 100 dollars a barrel typically results in petrol prices of about 150p per litre, while oil hitting 120 dollars a barrel means petrol prices of about 170p per litre.
Rachel Reeves has said she would “not tolerate price gouging” by forecourt operators after some were recorded charging as much as 180p per litre for petrol. The chancellor has said she will meet with petrol retailers to discuss the rising prices.
But some have also called for the chancellor to cancel Labour's planned increase in fuel duty which will reverse the 5p-a-litre cut introduced in March 2022 in response to Russia’s invasion of Ukraine.
Ms Reeves announced a reversal of the cut in November’s Budget, beginning with a 1p increase in September this year, followed by 2p in December and the final 2p in March 2027.
She has so far rejected calls to scrap the plan, but has said the policy is “under review”. A Conservative bid to cancel the planned increase was defeated in the Commons on Wednesday.
