The average price of petrol in the UK has reached a new high, standing at 160p a litre. This marks the highest level since the Iran conflict began, with diesel prices also on the rise. According to the latest figures, petrol is currently at 159.97p a litre and diesel at 178.97p.
Petrol prices had previously fallen after the US and Iran agreed a framework deal in June to end the conflict. However, with the collapse of the peace talks, both petrol and diesel prices have risen, with diesel prices expected to reach 185p a litre in the coming weeks.
The price of fuel tends to track the wholesale price of oil, with every $10 (£7.44) per barrel increase pushing up pump prices by roughly 7p a litre. The global benchmark, Brent crude, has seen significant price fluctuations due to the conflict, peaking above $120 and now trading at around $90.
News of further conflict has driven the price up, while hopes of an end to the war have pushed it down. Despite the rises, petrol and diesel remain below the levels reached in the summer of 2022 following Russia's invasion of Ukraine, when petrol hit 191.5p a litre and diesel 199p.
The conflict has effectively closed the Strait of Hormuz, through which about 20 per cent of the world's oil and liquefied natural gas normally passes. Experts warn that even if a deal is agreed to reopen the strait, it will take time before normal levels of shipping resume, and the impact of the war could continue to affect the global economy for months.
The UK is heavily reliant on oil and gas imports, with the majority coming from the US and Norway, and pays the price set on the global market. Fuel retailers have denied accusations of price gouging during the conflict, and the official markets regulator has stated that it has "not seen evidence of retailers actively changing their pricing strategies to take advantage of the crisis."
A government scheme called Fuel Finder lets drivers compare the cost of fuel at petrol stations across the UK. According to the AA, the speed at which prices have fallen can be attributed to the scheme, which gives drivers the opportunity to find the best deals.
The UK government also announced a postponement of a planned 5p increase in fuel duty due to the conflict, with the increase now set to take place in December. The decision was made in response to the ongoing crisis in the Middle East.
