Diesel prices reached an all-time high in the UK on 28 September as the soaring price of oil continues to push fuel prices up.
A litre of diesel will now cost motorists an average of 199p, the most it has ever cost in the UK, and is predicted to rise further.
It means filling up the average family car with a 55-litre diesel tank will cost almost £110, £31 more than it cost before the Iran war, according to RAC.
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Simon Williams, head of policy at RAC, said: “By eclipsing the previous highest price of 199.09p seen in June 2022, the diesel price has entered new uncharted territory.
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“This spells pain not only at the pumps for drivers, but for everyone who buys goods or services that rely on diesel lorries and vans; undoubtedly these increased costs will be passed on to consumers.”
Meanwhile, petrol prices are at their highest since August 2022 when prices were elevated in the aftermath of Russia’s invasion of Ukraine.
A litre of petrol now costs an average of 174p, meaning it will cost almost £96 to fill up a 55-litre tank.
The main driver of accelerating fuel prices since February has been the Iran war which has disrupted oil infrastructure and trade in the Middle East. That, in turn, has caused the price of oil, which is used to make petrol and diesel, to soar.
Williams said: “These extraordinarily high prices are another reminder of just how exposed the UK is to events occurring far away from its shores. Only a sustained lower oil price – over several weeks, not days – will lead to cheaper prices at the pumps.”
While the UK has “limited leverage when it comes to ending the US/Iran war and ultimately bringing oil prices down”, Williams urged the government to take steps to ease the burden on drivers by lowering fuel duty further or reducing VAT.
RAC forecasts the price of diesel to continue to rise, but expects petrol prices to fall.
What does turbulence in the oil market mean for petrol prices?
Both petrol and diesel are made by processing oil, meaning any price fluctuations in the oil markets will be reflected in the price of fuel.
A good example of this can be seen in 2022, when oil prices soared in the wake of Russia’s invasion of Ukraine and countries across Europe, including the UK, restricted the oil supply available to Russia. Petrol prices spiked to 191.43p per litre in July 2022.
This is similar to what is happening now. A constrained global oil supply is leading to price increases for oil derivatives like petrol and diesel in the UK.
Where can you find the cheapest fuel?
Supermarkets are often the most cost-effective places to fill up your tank as they benefit from economies of scale when buying in bulk, and are especially incentivised to offer a good deal so customers are attracted to their shops.
This, paired with rewards schemes that many run (such as Nectar at Sainsbury's and Tesco Clubcard) mean supermarkets have competitive prices.
To find the best deal, take a look at the government-run Fuel Finder or Petrol Prices.
To keep the cost of refuelling low, you should also try to stay away from the pumps at motorway service stations.
