UK diesel prices have climbed to an unprecedented 199 .18p per litre, overtaking the previous peak set in 2022. this price surge arrives as US President Donald Trump evaluates potential restrictions on fuel exports to lower costs for American consumers.
The 199.18p milestone and the £110 tank
According to the RAC, the average cost of diesel has hit 199.18p per litre, narrowly surpassing the June 2022 record of 199.09p. This increase has a direct impact on household budgets, with the RAC reporting that filling a standard family car now costs nearly £110, representing a £31 jump since the start of the US-Iran conflict.
The price pressure is not limited to diesel. Unleaded petrol has also risen to an average of 174.13p per litre, an increase of 41p since the conflict began, which brings the cost of a full petrol tank to approximately £96. Simon Williams , the RAC head of policy, warned that these costs will likely trickle down to the general public as diesel-reliant delivery vans and lorries pass their increased overheads onto consumers.
Trump's November midterm strategy and the threat of export curbs
The current volatility is being exacerbated by US domestic politics. President Donald Trump told Fox News that he is seriously considering restricting US fuel exports to keep gasoline prices low for Americans ahead of the November midterm elections. While such a move aims to protect US voters, it threatens to tighten the global supply of fuel.
As the report says, the White House has heightened market anxiety by scheduling a mystery announcement for 7pm UK time. While the specific nature of these limits is not yet known, the prospect of the world's largest fuel exporter curbing supplies has sparked fears of a devastating ripple effect across European energy markets.
Brent Crude at $108 and the risk of European recession
Global oil markets are already under severe strain due to the US-Iran war crisis, which has pushed Brent Crude prices above $108 a barrel overnight. Economists warn that while US export curbs might provide a short-term price drop within the United States, they could drive long-term global prices higher and potentially push several European nations into recession.
Business Secretary Jonathan Reynolds addressed these concerns during a Politico event at the Labour conference, stating that such export restrictions would be a "significant concern" for the UK. However, Reynolds maintained that the UK remains resilient due to its diverse supply chains across multiple sectors, including fuel.
Chancellor John Healey's £24 billion fuel duty dilemma
The price spike has placed immediate pressure on Chancellor John Healey to provide relief in next month's Budget. Fuel duty is a massive revenue stream for the UK government, raising £24 billion last year and accounting for 52.95p per litre of the current pump price.
Prime Minister Sir Keir Starmer previously delayed a planned 5p increase in fuel duty until the end of the year, but opposition parties and the RAC are now calling for a further extension of this freeze. The decision facing Chancellor John Healey will be whether to protect the Treasury's revenue or shield motorists and businesses from record-breaking costs.
The 7pm White House announcement and the £3 per litre warning
Significant uncertainty remains regarding the actual scale of the US government's planned intervention. Market experts have issued dire warnings that if export curbs are aggressive, UK diesel prices could potentially soar to £3 per litre, though the source does not confirm if this is a baseline projection or a worst-case scenario.
It remains unclear exactly which fuels will be targeted by the White House or how long any restrictions would last. Furthermore, the report focuses primarily on the US and UK perspectives, leaving the specific reactions of other major EU importers and OPEC+ members unaddressed.
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