Iran Oil Crisis Costs UK Drivers £307 Million in Fuel Price Surge
New analysis from the RAC Foundation has revealed that the ongoing Iran oil crisis has cost UK drivers more than £300 million in increased fuel expenses. The motoring research charity calculated that rising pump prices since the conflict began on February 28 have resulted in motorists paying an additional £307 million for petrol and diesel.
Oil Prices Soar Amid Strait of Hormuz Stranglehold
Oil prices have skyrocketed to as much as 120 dollars per barrel in response to Iran's stranglehold on tankers passing through the critical Strait of Hormuz. This geopolitical tension has directly translated to higher costs at UK forecourts.
The average price of a litre of petrol at UK filling stations has risen from 132.9p on February 27 to 146.4p as of Monday. Meanwhile, diesel prices have surged even more dramatically, climbing from 142.4p to 169.8p over the same period.
Calculating the Financial Impact
The RAC Foundation's analysis considered average daily pump prices alongside fuel consumption rates to determine that UK drivers have spent an estimated £4.574 billion on petrol and diesel since February 28. This figure would have been £4.267 billion if pump prices had remained broadly stable, creating the £307 million difference that the charity describes as a "direct cost" of the conflict.
Steve Gooding, director of the RAC Foundation, emphasized the broader economic implications: "This puts a financial price on the war not just for UK drivers but also the nation's businesses. Whether you are running a household or a company, fuel prices make up a significant part of the budget."
Gooding further warned that the financial impact would continue to escalate "even if the conflict was resolved tomorrow" due to the time lag between changes in barrel prices and pump prices, plus the extensive time required to repair war damage to oil production, refining, and distribution infrastructure.
Political Response and Retailer Concerns
In the House of Commons, Labour MP Andrew Cooper raised concerns about potential exploitation, stating that motorists were being "exploited by unscrupulous petrol retailers who are not letting a crisis go to waste." He highlighted one retailer in his Mid Cheshire constituency selling unleaded fuel at 15p per litre more than the cheapest forecourt in the area.
Cooper questioned whether the Competition and Markets Authority possesses sufficient power to address such practices. Chancellor Rachel Reeves responded by highlighting the upcoming Government Fuel Finder initiative, which will provide drivers with comprehensive price information across different filling stations.
"Already in France, you can see on any map, on an app on your phone or your satnav, the different prices of petrol at different filling stations, and that is where we will be in just a few weeks' time," Reeves explained.
Fuel Duty Debate and Government Advice
There are growing calls for the Government to postpone a planned fuel duty increase scheduled for September, given the current surge in pump prices. Chancellor Reeves had previously announced in her November 2025 budget that the 5p-per-litre fuel duty cut introduced in March 2022 would only be extended until August 2026, with rates gradually returning to March 2022 levels over the subsequent five years.
On Tuesday, energy minister Michael Shanks insisted that motorists should maintain normal driving habits despite the conflict. When asked by Times Radio if British drivers should change their behavior, he responded: "They should do everything as absolutely normal because there is no shortage of fuel anywhere in the country at the moment. We monitor this every single day, I look at the numbers personally. There's no issue at all with that."
This stance contrasts with advice from the International Energy Agency, which has recommended that motorists worldwide reduce highway speeds, share rides, and work from home when possible to decrease fuel consumption.
The RAC Foundation's analysis underscores how geopolitical tensions in the Middle East are creating significant financial pressures for UK households and businesses, exacerbating the ongoing cost-of-living crisis through increased transportation expenses that ultimately affect all consumers.
