UK Petrol and Diesel Prices Fall in April After 46 Days of Increases
UK motorists experienced a sustained rise in fuel costs following the US-Israel war with Iran, which began on 28 February. However, prices have now started to ease, according to motoring firm RAC.
The conflict led to significant disruptions in energy production and transportation across the Middle East, causing crude oil prices to surge. Analysts estimate that every USD#10 increase in oil prices translates to approximately 7p per litre at the pump.
The price of a barrel of Brent crude, the international benchmark, demonstrated considerable volatility, peaking near USD#120 before falling back below USD#100. Despite the recent drop, current prices remain elevated compared to pre-war figures.
The cost of filling a typical family car with petrol increased by around GBP#14, while diesel saw an increase of approximately GBP#27. RAC data indicates that average petrol and diesel prices began to fall on 16 April, concluding a 46-day period of continuous increases—the longest such run on record.
During the peak, petrol reached 158.3p per litre and diesel 191.5p per litre. As of Monday, petrol stood at 157.7p and diesel at just under 190.5p, with further declines anticipated.
Prices are still below the levels observed in summer 2022, when petrol hit 191.5p and diesel reached 199p per litre following Russia's invasion of Ukraine.
Simon Williams, RAC head of policy, stated that “the drop ought to accelerate this week as more retailers buy in new supply at lower costs.” Due to the time required for oil transportation, wholesale price changes typically take about two weeks to reflect at the pumps. Fuel retailers have refuted accusations of price gouging, with the official markets regulator currently investigating the matter.
Strait of Hormuz Remains Critical Factor
The status of the Strait of Hormuz continues to be a crucial element in wholesale market dynamics. This waterway, through which approximately 20% of the world’s oil and liquefied natural gas passes, has seen severe restrictions since the conflict began. While Iran has offered conflicting statements regarding its openness, the ongoing uncertainty suggests oil prices are likely to remain above pre-war levels. Damage to oil and gas facilities across the Gulf has also significantly disrupted refining capacity.
The UK, heavily reliant on oil and gas imports primarily from the US and Norway, is directly affected by global market prices. Although North Sea oil is extracted, most is exported for refining abroad.
In March, Shell’s chief executive warned of potential fuel shortages in Europe within weeks due to the Strait of Hormuz closure. The International Energy Agency (IEA) has proposed measures such as working from home and carpooling to reduce energy consumption.
Oil constitutes 35% of the UK’s total energy supply. The UK government maintains that the country's fuel supplies are “resilient,” and Fuels Industry UK advises the public to continue as normal.
While some analysts advocate for easing North Sea drilling licence restrictions to mitigate price rises, others argue this would have minimal impact on public energy costs. Household gas and electricity bills under the price cap are shielded from wholesale cost fluctuations until July, though cheaper fixed deals are being withdrawn by some suppliers.
Households using heating oil, particularly in Northern Ireland and rural areas, face more direct price increases reflecting the volatile oil market. The government has announced a GBP#53m support package for those affected.
