UK fuel prices are back on the rise following the collapse of peace talks to end the US-Israel war with Iran.
When the conflict began on Saturday 28 February, fuel prices surged due to disruption of the production and transportation of energy across the Middle East. However, prices came back down after the US and Iran agreed to a framework deal to end the fighting in June. Since then, tensions have resurfaced – and so have fuel prices.
Crude oil is a vital ingredient in petrol and diesel, which means that higher wholesale costs make filling up a car more expensive. Analysts say that every $10 (£7.53) increase in the oil price pushes up pump prices by roughly 7p a litre. Since the war began, the price of a barrel of Brent crude – the global benchmark for wholesale oil prices – has been very unpredictable. Before the conflict, Brent was around $70 (£52.13) a barrel, but over the last few months we have seen it peak at above $120 (£89.36). In early July, after the framework deal was signed, prices fell back down to near the $70 a barrel mark but have since risen again to about $87 (£64.79) a barrel.
According to the RAC, the average price of petrol reached an Iran war peak of 159.53p a litre on Thursday 28 May, while diesel's highest average price during the conflict was 191.54p a litre on Wednesday 15 April. In early July, the RAC said that the average price had dropped to 150.50p a litre for petrol and 164.52p a litre for diesel, but now, according to its latest data, petrol costs 152.54p a litre while diesel costs 167p a litre.
Because transporting oil is a slow process, price movements in the wholesale markets take about a fortnight to show at the pump.
Fuel retailers have denied accusations of price gouging during the conflict. The official markets regulator said it had not seen any evidence of retailers taking advantage of the ongoing conflict by changing their pricing strategies.
On 20 May, former Prime Minister, Sir Keir Starmer, said that the planned 5p increase in fuel duty due in September would be postponed until Thursday 31 December because of the conflict.