UK diesel prices reach record high at 199.18p per litre

Diesel prices in the UK have reached a record high, with the average cost of a litre rising to 199.18p on Monday, according to figures compiled by the RAC and reported by the Press Association.

The price is 56.8p higher than at the start of the US-Iran war on February 28 this year, when a litre averaged 142.38p. It also exceeds the previous record of 199.09p, reached in June 2022 after Russia’s invasion of Ukraine.

The RAC data is based on average diesel prices at supermarkets, motorway service stations and independent retailers.

### Global supply pressures

Diesel prices have risen steadily in recent weeks amid disruption to global supplies linked to the continuing conflict between Russia and Ukraine and renewed hostilities in the Middle East.

Russian diesel exports have dropped sharply after a number of the country’s oil refineries were targeted by Ukraine. A key facility near Moscow was damaged earlier this month during a large drone operation, according to the Press Association report.

The reduction in Russian exports has increased demand for fuel from other diesel-exporting countries, contributing to higher wholesale prices.

The conflict between the US and Iran is also disrupting trade in refined oil and other petroleum products. The evidence reports that Iran’s effective blockade of the Strait of Hormuz is limiting the production and supply of fuel available to consumers.

The report also said US President Donald Trump was threatening a diesel export ban to address rising prices in the US.

Chancellor John Healey told ITV News that the situation was a concern. He said the Government had introduced a Fuel Finder to help people locate cheaper forecourts and had frozen any rise in diesel duty until the end of the year.

Asked whether the current 5p cut in fuel duty would be extended beyond the end of the year, Mr Healey said he would announce the decision in the Budget on October 28.

“I’m conscious of the pressure this is putting on people, on businesses as well as people at the pumps,” he said, adding that the Government would seek to give people “a bit of breathing space”.

Mr Healey also said the Government was discussing the situation with the US and that ending the conflict in the Middle East, reopening the Strait of Hormuz and potentially supporting a multinational mission to secure the waterway would do more to reduce prices than other measures.

### Impact on drivers and businesses

RAC head of policy Simon Williams said the record price would be a financial blow to households and businesses that regularly use vehicles.

The cost of filling an average family car is now almost £110, according to Mr Williams, who said that was £31 more than at the start of the US-Iran conflict.

He warned that the impact would extend beyond forecourts because goods and services relying on diesel-powered lorries and vans could become more expensive.

“Only a sustained lower oil price – over several weeks, not days – will lead to cheaper prices at the pumps,” Mr Williams said.

Unleaded petrol has also become more expensive. Its average price currently stands at 174.13p per litre, an increase of 41.3p since February 28.

The latest Department for Transport figures cited in the report show that 15.1 million diesel-fuelled vehicles were licensed for use on UK roads at the end of June this year, down from 15.7 million 12 months earlier. The number of diesel cars fell from 10.4 million to 9.8 million.

There were 20.4 million petrol vehicles licensed for use on the roads in June, including 18.8 million cars.

Edmund King, president of the AA, said record diesel prices could be damaging for the economy and for diesel drivers. He said most delivery trucks and much of the road freight moving goods to ports and shops use diesel.

Mr King warned that hauliers generally pass higher fuel costs to customers, meaning increased diesel prices can feed through to the cost of goods and contribute to inflation.

### Fuel duty decision due at Budget

Motoring organisations have urged the Government to extend the current 5p cut in fuel duty beyond the end of the year, when it is scheduled to be reversed.

Mr Williams said the Government could reduce fuel duty further or cut VAT to ease pressure on drivers. He acknowledged that the UK had limited influence over the conflicts affecting global oil prices but said domestic tax measures could reduce the burden at the pumps.

Mr King said the Government could cancel the planned 5p increase in fuel duty and reduce duty by a further 5p. He argued that higher pump prices had increased VAT receipts for the Treasury.

Treasury minister Emma Reynolds described the record diesel price as “very worrying” in an interview with BBC Radio 4’s *The World At One*. She said the Government had “levers” it could use to ease the burden, while also identifying de-escalation in the Middle East as a foreign-policy priority.

“We recognise that people face challenges at home,” Ms Reynolds said. “Diesel is very worrying, not only for families but obviously also for businesses.”

She said the fuel duty freeze had been extended until the end of the year and that decisions beyond that point would be taken at the Budget.