Millions of UK drivers have paid an extra £2 billion for petrol and diesel since the start of the Iran war, according to new data from the RAC Foundation. The motoring research charity revealed that motorists have spent an additional £500 million on petrol and £1.5 billion on diesel in just over a month.
Soaring Pump Prices
The average price of petrol on Thursday stood at 156.98p per litre, down from a peak of 158.31p, while diesel was 188.53p per litre, down from 191.54p. Before the Iran war began in early February, the average petrol price was 132.83p per litre and diesel was 142.38p per litre. The analysis also indicates that the Treasury has received over £336 million in additional VAT from the price increases, based on average daily pump price rises and last year's fuel consumption rate.
Impact on Motorists
Steve Gooding, director of the RAC Foundation, commented: "This is another unwelcome milestone for millions of motorists as the financial pain caused by the war in the Persian Gulf continues to mount up. As ministers themselves have warned, the economic effects of the conflict could last for months even after it has ended." He added that diesel vehicle owners have borne the brunt of the price hikes, many of whom are commercial users with little choice but to pass on costs to their customers. "Whether we are drivers or not, we all end up feeling the pinch from sky-high forecourt fuel prices," Gooding said.
Crude Oil Spike
Petrol and diesel prices have soared following the closure of the Strait of Hormuz, which caused a sharp spike in crude oil prices. Brent crude briefly surged past $126 (£94) a barrel on Thursday, its highest level since 2022 and the Russian invasion of Ukraine, amid fears of fresh US strikes on Iran. It later fell to just over $121 (£89) a barrel. Peace talks between the US and Iran appear to have broken down, with Axios reporting that the US military is set to brief President Donald Trump on new action against Iran. Trump told reporters in the Oval Office on Wednesday that there would be no deal until Tehran commits to not having a nuclear weapon.
Energy Costs Ahead
UK households also face higher energy costs this summer due to the conflict, with Ofgem set to announce its next price cap level for July next month.
