RAC data has shown that UK diesel prices have hit an all-time high of 199.18p per litre, placing greater strain on the UK’s industrial sector which is already grappling with enormous energy costs and wider challenges around supply chain disruption.
Conflicts that continue to rage in the Middle East and Ukraine has seen the cost of diesel continue to rise as demand begins to outstrip supply. While many consumers either drive unleaded petrol cars or have switched to electric or hybrid, much of the nation’s industry, including manufacturing, logistics and agriculture still rely very much on diesel fuel.
Over the past seven months, the Iran war has severely disrupted the production and transportation of wholesale oil across the region, causing the price of fuels made from oil to surge. Likewise, Russia has also implemented an export ban on diesel, further restricting the flow of oil around the globe.
The UK is heavily reliant on imports. Although the four refineries in the UK make more than enough petrol to meet demand, they do not make enough diesel for the country’s needs.
Speaking to the BBC, the RAC said diesel prices had entered “uncharted territory” and served as a reminder of “just how exposed the UK is to events occurring far away”.
Not only that, but to ensure his own country’s continued supply, US President Donald Trump is considering a diesel export ban in order to protect domestic consumers from those rising costs. This would add yet another blow to UK users and add further strain on supply as the vast majority of the UK’s diesel imports currently come from the US market, supplying approximately 31% of Britain’s diesel imports last year alone.
Add to this the fact that the UK has recently seen closures of major domestic refineries like Grangemouth and Lindsey – thus significantly reducing the UK’s capacity to refine its own fuel, and making the country more dependent on imports – then it’s clear a perfect storm could be brewing.
This news will place even greater focus on next month’s Budget and speaking on this latest development, Chancellor John Healey commented: “We can’t remove the cost of living pressures, we can’t remove the prices that people are having to pay, but where we can we will act and we will give people just a bit of breathing space, and the same goes for the cost to business.”
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