Fuel prices are beginning to climb again for motorists across the UK, reversing a recent downward trend. The increase comes after a fresh wave of US strikes over the weekend, launched in response to an Iranian attack on a container ship in the Strait of Hormuz, which is impacting global oil prices.
Over the weekend, the average price of a litre of petrol rose to 151.0 pence, up from a six-week low of 150.7 pence recorded earlier in the week. Diesel prices have seen a more gradual increase, moving from 164.8 pence to 164.9 pence per litre. Currently, only Northern Ireland, the North East, and Yorkshire and the Humber regions remain below 150 pence per litre for petrol.
This uptick in pump prices is attributed to a significant rise in wholesale fuel costs. Wholesale petrol costs have increased by 3p to 4p per litre since the end of June, while diesel costs have jumped by more than 6p per litre in the same period. These increases follow a period of dramatic price falls during June, which were driven by lower oil prices amid ceasefire talks. In June, the average price of a litre of diesel saw a record 17p fall. However, the renewed US-Iran conflict has disrupted this trend, leading to higher oil prices.
Diesel prices have also been further influenced by Russia's recent ban on fuel exports. The cost of fuel for drivers has experienced considerable volatility since the beginning of the US-Iran conflict. In April, petrol and diesel prices reached highs of 159.0 pence and 192.4 pence per litre, respectively. Prices then fell with expectations of a ceasefire, before rising again in May when negotiations faltered.
Throughout June and into July, petrol prices dropped to 150.7 pence per litre at the start of the previous week, while diesel decreased from 184.4 pence in late May to its current average. Experts suggest that savings drivers have recently enjoyed may soon disappear. Simon Williams, a fuel price expert at the RAC, indicated that drivers planning summer holidays might see prices rise by a couple of pence per litre in the coming week. The future of pump prices in the UK remains contingent on further developments in the US-Iran tensions.
Impact on Electric Vehicle Adoption
The volatility of petrol and diesel prices appears to be significantly influencing the uptake of electric vehicles (EVs), according to new government statistics. The Department for Energy Security and Net Zero has begun to separate electricity consumption data for road vehicles from overall transport energy use.
These new figures reveal a 30.7 percent increase in electricity consumption by road vehicles between 2024 and 2025. In the first quarter of 2024, electricity consumption by EVs rose by an additional 28.1 percent. Car registration data supports the suggestion that higher fuel prices have spurred increased demand for EVs.
In June, the Society of Motor Manufacturers and Traders (SMMT) reported that 213,166 new cars were registered, an 11.4 percent increase compared to the same month last year, marking the best June since 2019. Pure battery electric cars constituted 30 percent of sales in June, up from 24.8 percent a year prior. The SMMT described these sales figures for electric cars as 'significant'.