Former BP Executive Predicts Diesel Prices Could Exceed £2 per Litre
Professor Nick Butler, a former vice-president for strategy and policy at oil giant BP, has issued a stark warning that diesel prices in the UK could surge to over £2 per litre in the coming weeks. He described it as "perfectly sensible" for the government to encourage remote working to help mitigate fuel shortages exacerbated by the ongoing conflict in Iran.
Impact of Iran Conflict on Global Oil Markets
The US-Israeli military action in Iran, which began in February, has driven oil prices to record highs, with costs increasing by more than 60% so far this year. This surge is largely due to the blockade of the Strait of Hormuz, a crucial shipping lane for global oil supplies. Professor Butler emphasised that the worst effects of this crisis are yet to be felt in Britain and Europe.
"The real crisis for Britain and for Europe will come at the end of April and in early May, when the real shortage will translate into both a physical shortage and a sharp rise in prices," he stated. He added that the full impact of the supply loss has not yet been reflected in current prices.
Call for Government Action on Remote Working
During an interview with Times Radio, Professor Butler highlighted that some Asian countries have already implemented measures such as an extra day of remote working per week to conserve fuel. He urged the UK government to follow suit, suggesting that promoting work-from-home policies could be an effective response to the energy crisis.
"People are being encouraged to work at home. And I think you have to test now whether there's a willingness," he said. "And as I read the behavioural science, people do respond. They don't all do it perfectly, but they respond if other people are responding." When asked if the government should formally recommend remote working, he affirmed, "Yes, I think that that would be a perfectly sensible measure."
Potential for Further Price Increases
Professor Butler, who previously served as an adviser to former Prime Minister Gordon Brown, warned that diesel prices could climb significantly higher than £2 per litre. He noted that jet fuel prices have already doubled and could rise further, indicating broader inflationary pressures in the energy sector.
"It could go a good deal north of that," he remarked regarding the £2 per litre threshold. He also criticised what he perceived as complacency in the market, stating, "I think there's been a degree of complacency and a belief that Mr (Donald) Trump would always come back into line and there would be a deal, and then everything would be OK."
The professor's warnings underscore the urgent need for proactive measures to address potential fuel shortages and price spikes, with remote working emerging as a key strategy to reduce consumption and stabilise the market during this turbulent period.
