The United Kingdom has seen diesel prices soar above £2 a litre for the first time, as reported by the RAC motoring group. This new record of 200.01p a litre comes amidst continuously climbing petrol prices, which now average 174.71p a litre.
Global Factors and G7 Measures
The ongoing Iran war has significantly disrupted the production and transport of oil and refined products over the last seven months, leading to a global price surge. Ukrainian assaults on Russian refining facilities have further restricted diesel availability, compounded by China’s decision to limit refined fuel exports.
To combat these rising prices, the G7 countries held an emergency meeting on Friday, agreeing to release 100 million barrels of oil. Additionally, they committed to not imposing export restrictions on each other. This move came after Donald Trump, the US President, considered banning American diesel exports, which could have led to higher global fuel prices, though potentially easing pressure domestically ahead of the upcoming midterm elections.
Impact on Local Businesses and Individuals
Simon Williams, the RAC’s Head of Policy, described the £2 per litre diesel price as an “unwanted threshold” that poses significant challenges to high-mileage households and businesses, including commuters, delivery firms, and sole traders. This sentiment is shared by numerous UK businesses and consumers who feel the growing financial strain of these higher prices.
Mark Means, a long-time farmer in Norfolk, voiced his distress at the increased diesel costs. Having invested £50,000 in new diesel tanks recently, he expressed concern over diminishing profit margins. Meanwhile, Steven Tompkins, a driving instructor from Leicester, explained that diesel price hikes are forcing instructors to raise lesson fees, impacting especially those students who depend on part-time work.
Government Response and Supply Concerns
The UK government reassured consumers earlier on Friday about the resilience and diversity of the nation’s supply chain amidst these challenges. A spokesperson highlighted ongoing dialogue with international partners and the domestic fuel industry, emphasising that there is no immediate threat of diesel shortages. Currently, over half of the UK’s diesel is imported, with approximately 17% coming from the US.
The financial burden of these hikes is evident, as RAC figures indicate it now costs approximately £110 to fill an average family diesel car—£32 more than the onset of the US-Iran conflict. For owners of petrol cars, the cost has risen to £96.09, marking a £23.03 increase since February.
Reporting based on coverage first published by bbc.co.uk.