Fuel costs across the United Kingdom have reached unprecedented levels, with diesel prices climbing to a new all-time high, according to data compiled by the RAC.
The average price of a litre of diesel now stands at 199.18p, surpassing the previous record of 199.09p established in June 2022.
The automotive organisation estimates that filling a standard family vehicle with diesel now requires nearly £100, representing an increase of £31 compared with prices before the commencement of the Iran conflict.
Petrol users are also experiencing the effects of rising costs, with unleaded fuel averaging 174.13p per litre, bringing a complete tank to approximately £96.
Simon Williams, the RAC’s head of policy, indicated that the price surge creates difficulties not only for motorists at filling stations but also for consumers purchasing goods and services transported by diesel-powered vehicles, as higher operating expenses are likely to be transferred to final prices.
The RAC has attributed the escalation to persistent geopolitical instability, including tensions between the United States and Iran alongside the ongoing conflict between Russia and Ukraine.
Williams suggested that only a prolonged period of reduced oil prices would alter the current trajectory.
Regarding potential government intervention, Williams noted that while the United Kingdom possesses limited influence over resolving the US-Iran hostilities, ministers could implement measures to alleviate financial pressures on drivers through additional reductions to fuel duty or adjustments to value-added tax.
The AA has similarly advocated for extending and expanding the existing fuel duty reduction, cautioning that independent enterprises and rural populations dependent on diesel face the greatest strain.
Luke Bosdet, the AA’s spokesperson on road fuel economics, pointed out that compelling arguments exist for providing additional relief to diesel given its proximity to the July 2022 benchmark of 199.1p per litre.
He observed that larger corporations typically incorporate increased diesel expenditure into customer pricing through variable fuel surcharges, whereas smaller enterprises lack such mechanisms.
This category encompasses taxi operators, tradespeople, home maintenance services, veterinary practitioners, farriers, and numerous other professionals requiring vehicles to serve their clients.
Bosdet further highlighted the disproportionate impact on countryside areas, where diesel consumption is substantial due to greater travel distances, and where residents often contend with more modest incomes while managing elevated transportation costs.
The Treasury currently applies a 5p per litre reduction to fuel duty, representing 6p per litre at the forecourt when value-added tax is factored in.
Proposals had been under consideration to discontinue this reduction at the beginning of the following year, though escalating prices may necessitate a reconsideration of that approach.
Bosdet cautioned that any subsequent reduction to fuel duty might not immediately translate to lower prices for consumers.
The Competition and Markets Authority expressed criticism in August regarding the road fuel sector’s profit margins and the pace at which potential savings were being passed on to customers.