UK Petrol Prices Reach Highest Level Since Iran War Began

What changed

Average UK petrol prices have risen to 163.6p a litre, their highest level since the Iran war began on 28 February. Diesel costs 184.99p a litre. The RAC said drivers will “almost certainly” pay noticeably more in coming weeks if oil prices remain elevated. BBC News

Why it matters

Conflict-related disruption to Middle East oil supplies pushed Brent crude from about $70 a barrel before the war to above $120. Brent later fell near $70 after a US-Iran framework deal, but rose again after peace talks collapsed and is now around $94. Analysts estimate that a $10-per-barrel increase in oil adds roughly 7p a litre to pump prices, typically after about a fortnight. BBC News

A planned 5p fuel-duty increase due in September has been postponed until the end of December.

Across our coverage

The Iran war’s effect on UK households is being transmitted through wholesale oil: supply disruption lifts Brent, which then raises forecourt prices after a delay.

Impact assessment

• UK drivers: higher petrol costs now, with further increases possible.
• Diesel buyers: exposed to higher prices; diesel has risen from 164.52p in early July to 184.99p.
• Fuel Finder users: can compare station-level prices; the AA credited the scheme with helping drive earlier price falls.
• Fuel retailers: face higher wholesale costs and regulatory scrutiny. The markets regulator said it had seen no evidence that retailers were changing pricing strategies to exploit the crisis. BBC News

Scenarios

Most likely: Petrol prices rise further in coming weeks if Brent remains elevated and wholesale increases continue reaching pumps.

Upside: Pump-price pressure eases if conflict conditions improve, oil disruption falls and Brent declines, as it did after the framework deal.

Downside: Petrol and diesel prices rise more sharply and persistently if fighting further disrupts Middle East supplies and Brent climbs from around $94.

What to watch next

Watch Brent’s movement from around $94 a barrel, RAC updates on average petrol and diesel prices, developments in peace talks and oil-supply disruption, and any new findings from the markets regulator on retailer pricing.