Petrol prices at UK forecourts have reached 160p per litre, marking the highest level since November 2022, according to the RAC. The increase represents a reversal of earlier declines that had brought prices down to 151p in early July following announcements of a ceasefire agreement in the Middle East. The price spike is adding financial strain to millions of households preparing for summer holidays.
Diesel prices have climbed 14.5p to 179p per litre, though they remain below the April high of 192p. The RAC estimates that filling a family-sized car with unleaded fuel now costs £88, while a diesel tank costs £10 more. According to the motoring organization’s analysis, wholesale petrol prices eased only marginally this week, insufficient to produce noticeable relief at pumps. Diesel is expected to continue rising and may reach 185p per litre in coming weeks unless oil prices experience a significant drop.
The price volatility stems from renewed geopolitical tensions. A ceasefire agreement reached in mid-June between the US and Iran had lowered fuel costs by extending a 60-day truce and allowing trade resumption through the Strait of Hormuz. However, recent US military actions against Iran have prompted retaliation, destabilizing the arrangement. On Friday, Iran’s Islamic Revolutionary Guard Corps reported striking two tankers in the strait and redirecting four additional vessels. Brent crude, the international oil benchmark, rose above $90 per barrel as a result.
The timing coincides with peak travel season, with AA polling indicating 20.5 million UK drivers plan journeys during the third week of holiday season. An AA spokesperson noted that 2.2 million drivers will travel 100-200 miles, 1.5 million will cover 200-300 miles, and 1.3 million will travel even further. The spokesperson also observed that fuel pricing transparency introduced in May through a government fuel finder scheme appears to have reduced traditional “rocket and feather” pricing patterns, with retailers now adjusting prices more closely to wholesale movements.
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