UK motorists have spent an additional £2 billion on fuel since the surge in pump prices following the Iran conflict, according to new data from the RAC Foundation. The data reveals that drivers have shelled out an extra £500 million for petrol and £1.5 billion for diesel in just over a month.
The average price of petrol on Thursday stood at 156.98p per liter, down from its peak of 158.31p, while diesel was priced at 188.53p per liter, down from 191.54p. Prior to 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 shows that the Treasury has received over £336 million in additional VAT, based on daily pump price increases and last year’s fuel consumption rates. Steve Gooding, director of the RAC Foundation, expressed concern over the financial burden on motorists due to the ongoing conflict’s economic impact, noting that these effects could linger even after the conflict ends.
The closure of the Strait of Hormuz has led to a surge in petrol and diesel prices, driven by a sharp increase in crude oil prices. Crude oil, the key ingredient in fuel production, saw prices exceed $126 (£94) a barrel on Thursday, the highest level since 2022. Concerns about potential US actions against Iran amid failed peace talks have contributed to the price volatility.
Amidst these developments, UK households are expected to face higher energy costs in the coming months, with Ofgem set to announce the next price cap level for July.
