UK motorists have spent an additional £2 billion on fuel since the surge in pump prices following the Iran conflict, according to the latest findings from the RAC Foundation. Data reveals that drivers have shelled out an extra £500 million for petrol and £1.5 billion for diesel within a little over a month.
On Thursday, the average price of petrol stood at 156.98p per liter, slightly down from its peak of 158.31p, while diesel was priced at 188.53p per liter, down from 191.54p. Preceding the onset of the Iran conflict in late February, petrol was priced at an average of 132.83p per liter, and diesel at 142.38p per liter.
Analysis indicates that the additional VAT revenue collected by the government has exceeded £336 million. These figures are based on the average daily increases in pump prices and last year’s fuel consumption rates.
Steve Gooding, the director of the RAC Foundation, remarked on the financial strain felt by motorists due to the ongoing conflict in the Persian Gulf. He highlighted that the economic repercussions of the situation could linger for months even after its resolution, with diesel vehicle owners bearing the brunt of the price hikes, potentially passing on costs to consumers.
The escalation in petrol and diesel prices is linked to the closure of the Strait of Hormuz, leading to a surge in crude oil prices. The latest spike saw oil prices peak at over $126 (£94) per barrel, the highest level since 2022. Despite a decrease to just over $121 (£89) a barrel later on, concerns persist over potential US actions against Iran.
As the US-Iran peace talks falter, UK households are expected to face increased energy costs this summer, with Ofgem slated to announce the next price cap level for July in the upcoming month.
