Will petrol prices rise this year?

Fuel prices have jumped as the escalating conflict in the Middle East is pushing up the price of oil.

While petrol and diesel prices started 2026 at a five-year low, the US and Israel’s strikes on Iran on 28 February have led to a rapid rise in the price of oil.

Petrol and diesel are made by enriching crude oil, meaning that when wholesale prices of oil increase, the price at the pump also increases.

Try 6 free issues of MoneyWeek today

Get unparalleled financial insight, analysis and expert opinion you can profit from.

Start your trial

Sign up to Money Morning

Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter

Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter

Sign up

On 9 March, the price of a barrel of Brent crude oil soared past $100 and has remained around this level since. It is the most expensive oil has been since 2022, after oil surged following Russia’s invasion of Ukraine.

Motorists are already feeling the pain at the pump. Between 2 March and 16 March, the price of a litre of petrol increased by 8.6p to an average of 138.6p per litre, according to the RAC.

There was a sharper rise in diesel prices, which increased by 18.3p per litre in the same time period, bringing the average price of diesel to 155.12p per litre.

The hikes mean the cost of filling up a 55-litre petrol tank is now more than £76, rising to £85 for drivers of diesel vehicles.

It takes a while for increasing wholesale costs of oil to be reflected in the price of petrol and diesel at the pump, meaning there could be more pain to come for those filling up.

What’s more, oil prices are set at the global level and, unfortunately for Brits, are priced in dollars, so drivers in the UK can be stung by fluctuations in the exchange rate.

With instability rampant in the oil market and the ongoing conflict in the Middle East and the Persian Gulf, we look at the outlook for petrol prices in 2026.

Why are oil prices volatile?

The price of oil has surged since the joint US and Israeli military action in Iran, which began on 28 February.

Oil prices increased because of the volatility these strikes have caused in the Middle East, where a large portion of the world’s oil supply is, threatening global supply lines.

In particular, disruption to trade traffic through the Strait of Hormuz, a vital route for oil tankers close to Iran, has led to surging oil prices as ships are unable to pass through safely.

What does turbulence in the oil market mean for petrol prices?

Both petrol and diesel are derivatives of oil, meaning that any price fluctuations in the oil markets will naturally impact the price of fuel.

We saw this 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.

If the conflict between Iran and Israel and the US continues, many analysts fear there will be a similar rise in the price of petrol.

The price of a barrel of oil is already much higher than it was before the conflict. A barrel of Brent crude cost around $72 when markets closed on Friday 27 February.

However, in weeks since the conflict erupted, oil climbed to a peak of $115 on 9 March, and prices have remained around $100 since.

Analysts at Goldman Sachs have warned that oil prices could reach $150 by the end of March if the disruption in the Strait of Hormuz is not remedied.

If the cost of oil continues to rise, the price of petrol and diesel will likely follow.

Simon Williams, head of policy at the RAC, said: “The fact that the cost of a barrel of oil has exceeded $100 and wholesale fuel prices continue to rise is concerning, but it’s the speed at which drivers are feeling the effects which is under the spotlight now.

“Drivers deserve – and should expect – to be treated fairly when it comes to filling up, especially with pump prices still heading north.”

Williams suggested that, with prices on the up, drivers should continue to fill up as normal, but shop around to find the best fuel prices. He said there can be large differences in prices at the pump even within one local area.

He added: “Driving fuel-efficiently by avoiding harsh accelerating and braking and ensuring tyres are inflated to the right pressures can help eke out every last mile and save money.”

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 often offer the best deals for petrol and diesel.

Right now, the best supermarket on average to fill up your car is Tesco, where petrol costs around 138.6p per litre.

Source: RAC Fuel Watch, 16 March

Among other brands, JET is currently the cheapest on average.

Source: RAC Fuel Watch, 16 March

To keep the cost of refuelling low, you are best advised to stay away from the pumps at motorway service stations.

This is because service stations are able to exploit their captive audience and can afford to charge them more.

The average UK-wide price of unleaded is 141.45p, but this figure climbs to 161.75p for the average service station, according to the RAC.