Petrol prices latest: Motorists hit by 23-year record over cost of diesel as Starmer prepares for emergency talks

Motorists have been hit by further prices rises at the pump, with experts predicting the impact of the Iran war could be felt for months.

The conflict in the Gulf has seen Iran continue its stranglehold on tankers passing through the Strait of Hormuz, leading to soaring oil prices with the cost of a barrel rising more than 3 per cent on Monday to $117.

Despite UK ministers insisiting there is no need for fuel rationing, over the weekend the boss of Asda warned of a temporary shortage at the pumps at the same time data reavealed spending on fuel jumped 11 per cent in the week after the war started.

Now latest data from the RAC shows the average price of a litre of diesel at UK forecourts has risen to 179.9p on Sunday, 28.5p more than petrol (151.4p), with the price difference at its highest level since at least 2003.

Steve Gooding, director of the RAC Foundation, said: “If oil prices remain at this level the impact on the forecourt could be felt for weeks, if not months.”

On Monday, Sir Keir Starmer is set to meet energy bosses in Downing Street to discuss emergency measures in response to the Middle East crisis.

Key Points

Oil prices up more than 3% on Monday
Expect rising prices in coming weeks, British consumers warned
Prime minister to meet business leaders in No10
Government preparing 'for all eventualities' when it comes to energy supply

Starmer ready to start Labour's local election campaign

10:46 , Alex Ross

Sir Keir Starmer is about to kick off Labour’s make-or-break local election campaign as he seeks to rally voters, and his own party behind him.

Labour is bracing for heavy losses at the polls this spring as the party continues to lose voters to both Reform on the right and the Greens to the left, in a blow which could spell the end of Sir Keir’s leadership.

The prime minister is at a launch event in Wolverhampton this morning, speaking to an audience full of his cabinet colleagues in a show of support.

Speaking ahead of the prime minister, Labour’s deputy leader Lucy Powell praised Sir Keir, said she was “immensely proud” of Sir Keir and his decision “not to follow blindly” into Donald Trump’s war on Iran.

Diesel price disparity hits new high

10:17 , Alex Ross

The price difference between diesel and petrol has reached the highest level since at least 2003 as the Iran oil crisis deepens, new figures show.

Latest data from motoring services company the RAC shows the average price of a litre of diesel at UK forecourts rose to 179.9p on Sunday, 28.5p more than petrol (151.4p).

UK oil refineries are more geared towards producing petrol than diesel, so the country’s supply of the latter is more reliant on imports.

Oil prices – which have a significant effect on the cost of wholesale fuel – have soared in response to Iran’s stranglehold on tankers passing through the Strait of Hormuz, sparking rising pump prices.

Motoring research charity the RAC Foundation warned it is the biggest price disparity between diesel and petrol since at least 2003, and possibly ever.

Latest DVLA figures show there were 16.2 million diesel vehicles licensed in the UK as of the end of September last year.

What will Starmer discuss with business leaders today

10:06 , Alex Ross

Bosses from energy, shipping and banking firms will meet Sir Keir Starmer this afternoon.

Oil prices spiked after Donald Trump said he was considering a military operation to seize Iran’s Kharg Island, a crucial part of the country’s export infrastructure.

The Downing Street discussions will involve representatives from energy firms Shell and BP, shipping giant Maersk, maritime insurance specialist Lloyd’s of London and banks HSBC and Goldman Sachs.

The meeting will also hear an update on the situation in the region from Major General Richard Cantrill, the UK’s maritime operations commander.

Downing Street said the aim of the meeting was to hear directly from businesses and discuss how the government and private sector can work together in responding to the conflict.

Reeves is ‘oblivious’ to the Iran war cost of living crisis, says Badenoch

09:58 , Alex Ross

Rachel Reeves has been accused by Kemi Badenoch of speaking “managerial mush” and being “oblivious” to the cost of living crisis facing millions of Britons.

The Conservative leader spoke out in response to an article by the chancellor published in The Independent in which she said “costs for working people are coming down” as a result of her policies.

Ms Badenoch said Ms Reeves’s claim was “politically tone-deaf” with regard to the daily struggle to make ends meet faced by ordinary families.

It was “classic Rachel Reeves, far too pleased with herself,” wrote Ms Badenoch in her response in The Independent.

But the Tory leader dismissed Ms Reeves’s words as “managerial, bureaucratic mush.”

Expect rising prices in coming weeks, British consumers warned

09:50 , Athena Stravou

British consumers have been warned to expect rising prices in the coming weeks and months as small businesses face “hugely concerning” energy costs.

War in the Middle East has seen oil and gas prices soar, amid Iran’s ongoing blockade of the Strait of Hormuz.

Small business leaders have warned they are now facing a “cost stack” comprising of these rising energy prices, alongside changes in government tax and employment policies.

Executive director of the federation of small businesses, Craig Beaumont, told Sky News the rise in fuel costs is a “huge concern”.

“It’s quite hard to see a scenario without rising prices. So diesel in particular for small businesses, they use vans to get around, we estimate that will increase their costs right now by about 15 per cent, so that has to come out of somewhere.”

'White House rhetoric is now falling on deaf ears'

09:48 , Alex Ross

We’re now a week on from when US president Donald Trump announced that talks were taking place with Iran’s leaders to end the war in the Gulf.

On Sunday, Mr Trump insisted that talks were progressing ‘very well’ after he sent a 15-point action list of demands via mediators.

But hopes of the war ending, and the Strait of Hormuz reopening to ease the strain on oil shortages, appear to have not convinced the markets, with oil prices rising again on Monday.

Richard Hunter, head of markets at Interactive Investor, said: “White House rhetoric is now falling on deaf ears, and only signs of concrete actions are likely to arrest the slide across most asset classes.

“As the war lingers, so the cost and time of reversing the damage will increase, likely meaning that the oil price could remain elevated for a longer period of time, increasingly inflationary pressure globally.”

'Real risk' the UK could face fuel shortage

09:35 , Alex Ross

As Sir Keir Starmer prepares to hold talks with Britain’s largest energy suppliers on Monday, he faces growing concerns over fuel shortages due to the war in the Middle East.

However, up to now, ministers have attempted to ease any panic, insisting the the UK does have adequate supplies of diesel and jet fuel. On Monday morning, environmental minister Emma Reynolds said people did not need to ration their food.

But speaking to the BBC’s Sunday with Laura Kuenssberg programme, Ellen Fraser, an energy expert at the consultancy Baring, said: “Yes, there is a real risk of the UK effectively running short. We’re relatively dependent on flows from the strait for jet fuel, particularly, and for diesel as well. We don’t hold huge stocks in the UK, then actually those can run down reasonably quickly. So that is effectively where the UK is most vulnerable.”

Oil prices up more than 3% on Monday

09:09 , Alex Ross

Oil prices have risen again to remain firmly at levels not seen since 2022 amid waning hopes of a quick resolution to the Iran war as the conflict entered its fifth week.

The cost of Brent crude lifted more than 3% to 117 US dollars a barrel at one stage in Monday morning trading amid continued attacks by the US and Israel on Iran, and with the Iranian-backed Houthi rebels entering the war on Saturday with its first missile attack.

London’s FTSE 100 Index opened the week on a firmer footing, edging 0.2% higher, up just over 22 points at 9989.56.

Matt Britzman, senior equity analyst at Hargreaves Lansdown, said: “Doubts over a quick resolution have grown after Iran backed Houthi militants stepped up attacks in the region, and the US moved additional troops closer to the conflict.”

Badenoch's plan to 'get Britain drilling' would have little impact, claims expert

08:55 , Alex Ross

Later today, we’ll be hearing from the Tory leader Kemi Badenoch as she travels to Averdeen to repeat her call for the UK to drill for more oil and gas in the North Sea.

She has said: “By drilling in the North Sea and scrapping Ed Miliband’s crazy green taxes, our cheap power plan would reduce bills by £200 for everyone.”

However, her claim has been disputed by some experts, including Dr Simon Cran-McGreehin, head of analysis at the Energy and Climate Intelligence Unit.

He said: “Experts are clear that more North Sea drilling would have little if any impact on gas prices in the UK given that international events largely dictate the price. Anyone paying a gas bill after the Russian invasion of Ukraine knows that. British renewables enable the UK to unplug from this volatile international energy system, with wind lowering the wholesale power price by around a third last year.”

'The markets aren't falling for Trump'

08:47 , Karl Matchett, business and money editor

President Trump might be suggesting - again - that negotiations are going well and a deal could be brokered with Iran soon, but the markets aren't falling for it this time.

Brent crude is up by more than 12% over the past week, sitting a little under $110 this morning and we're approaching the point where this is getting economists extremely worried.

That's not about the price of oil, of course, but it's knock-on effects: inflation and given where some places are economically (poor employment rates, central banks not in a position to loosen, stagnant economies) the real possibilities of recession.

The FTSE 100 has started the week in marginally positive territory, up 0.2 per cent, but is now up only 0.5 per cent for the year so far having previously been flying pre-Iran.

'The world still hasn't grasped the severity of the situation'

08:45 , Alex Ross

Finance and business publication Bloomberg yesterday published a story based on interviews with oil and gas traders, executives, brokes and shippers, in which it provided an assessment on the Iran war on the supply of oil and gas across the world.

It featured a ticker that showed the number of barrels lost to the effective closure of the Strait of Hormuz in the time the article was being read; 26,500 barrels in three minutes.

The experts told the publication that if the crisis lasted more than three months, it would become a “systemic problem for the world”, leading to huge oil shortfall in the western world, as is already being seen in Asia.

The piece states: “The world still hasn’t grasped the severity of the situation.... fuel crunches hitting Asia will soon start spreading west, they [experts] said.”

It's not just the oil - how impact on movement of fertiliser could impact UK

08:33 , Alex Ross

The price of oil has taken the headlines with motorists in the UK already seeing the impact at the fuel pumps.

But another product impacted by the effective closure of the Strait of Hormuz is fertiliser, with about a third passing through the waterway.

What does this mean?

Food experts fear this could lead to a hike in food prices as farmers may be unable to produce the quantity of food compared to previous harvests.

Carl Sakau, deputiy executive director of the World Food Programme,, told the Observer: “It this conflict continues, it will send shockwaves across the globe.

“Families who already cannot afford their next meal will be hit the hardest.”

Rachel Reeves to meet G7 finance ministers

08:13 , Holly Evans

Monday is also expected to see Chancellor Rachel Reeves join a virtual meeting of G7 finance and energy ministers and central bank governors along with Energy Secretary Ed Miliband.

Ms Reeves is expected to urge her counterparts to follow the UK’s lead and accelerate the transition away from fossil fuels, arguing this is the only way to get off the “rollercoaster” of international oil and gas markets and cut bills for good.

She is also expected to caution against resorting to protectionism as a response to disrupted supply chains and stress the importance of the G7 working together to maintain pressure on Russia, which is set to benefit from the higher oil price.

Minister denies that people will need to ration food as a result of Iran war

08:06 , Millie Cooke

A government minister has denied that people will need to ration food as a result of soaring prices following the war in the Middle East.

Environment minister Emma Reynolds told Sky News: "Look, we are not asking people to ration when it comes to food. Supply of food is as normal, just as the supply of petrol is. So no, we're not asking people to change their behaviour."

She added: "Obviously, if we did see further increases in energy prices that has an impact, that could have an impact on food inflation, that's what we saw with the Ukraine conflict.

“So we're keeping a very, very close eye on that. We're not complacent about any of these things."

Kemi Badenoch to repeat calls to drill for fossil fuels in North Sea

08:03 , Holly Evans

Conservative leader Kemi Badenoch will travel to Aberdeen on Monday to repeat her call for the UK to drill for more oil and gas in the North Sea.

The Conservatives have also called for a cut in VAT on domestic energy bills and the scrapping of green taxes on power generation, saying these measures will cut bills by £200.

Ahead of her visit, she said: “I know families and business owners across Britain will be very worried about how the global energy crisis will impact them. That’s why I find it appalling that Labour’s solution is to tax working people to fund a bailout for those on benefits.

“By drilling in the North Sea and scrapping Ed Miliband’s crazy green taxes, our cheap power plan would reduce bills by £200 for everyone.”

But speaking to the BBC’s Sunday With Laura Kuenssberg, Mrs Badenoch acknowledged that drilling on its own would not directly impact bills.

Government preparing 'for all eventualities' when it comes to energy supply

07:56 , Millie Cooke

The government is "preparing for all eventualities" when it comes to energy supply, a minister has said, but insisted that people do not need to "change their habits".

Asked whether the government is preparing for further energy price spikes as a result of the Iran war, environment secretary Emma Reynolds told Sky News: "Supply at the moment remains stable, but obviously we've got to prepare for all eventualities.

"We hope very much that this conflict can be deescalated, and we're leading international work with allies around that. But we obviously we have to plan in case that's not the case, which is why the prime minister, as you say, is meeting with leaders from energy companies and indeed, shipping and logistics today.

"But that is to make sure that we work constructively with the industry. We want to make sure there isn't any market abuse, of course, but we also need to prepare for all eventualities."

She added: "I want to just reassure your listeners that supply is stable. So we're not advising that people change their habits, they should fill up at the petrol pump as usual, and the price cap will affect people until the end of June."

Prime minister to meet business leaders in No10

07:48 , Holly Evans

Sir Keir Starmer will gather business leaders in Downing Street on Monday to address the impact of the Iran war.

The Prime Minister is expected to meet senior representatives from the energy, shipping and financial services industries amid warnings the UK could suffer serious economic damage as a result of the conflict.

Discussion is expected to focus on Iran’s ongoing blockade of the Strait of Hormuz, which has disrupted a vital shipping route for the oil and gas industry along with supplies of other products such as fertiliser.