UK Diesel Prices Surpass £2 Per Litre Amidst Government Uncertainty on Fuel Duty

The average price of diesel has now exceeded £2 per litre, according to the RAC Foundation, a significant milestone that intensifies pressure on the government to alleviate costs for drivers. This surge comes as ministers have yet to confirm whether a planned increase in fuel duty will be postponed.

The RAC Foundation reported that the average cost of diesel reached 200.03 pence per litre on the government's Fuel Finder website. This grim benchmark has amplified calls for government intervention, particularly in light of the ongoing Middle East crisis, which has global implications for fuel supply.

While Prime Minister Rishi Sunak stated that all options are being 'considered' to help mitigate the impact on the public, he also emphasized the need to remain mindful of the 'state of the public finances.' The situation is further complicated by threats of restrictions on U.S. diesel exports, though recent reports of improved supply have led to a dip in Brent Crude prices below $100 a barrel.

Steve Gooding, director of the RAC Foundation, highlighted that a substantial portion of the diesel price—86 pence per litre—is attributed to fuel duty and VAT levied by the government. He suggested that a reduction in these taxes would be a direct way for the government to support drivers and businesses struggling with the current economic climate.

"If this government wanted to help drivers and businesses it could cut the amount of tax it takes," Gooding said. "The prime minister says politics is about choices. Unfortunately most of the nation's drivers don't have the choice of whether to make a journey or not. They have to take the financial pain being inflicted on the forecourts."

Data from the RAC (distinct from the foundation) indicated that the average diesel price was fractionally below £2 per litre, at 199.72 pence. However, prices have been on a consistent upward trend in recent weeks, surpassing the previous record of 199.09 pence per litre set in June 2022.

Compounding the issue, fuel duty on diesel is scheduled to increase on January 1, from approximately 53 pence per litre to nearly 56 pence. When questioned about potentially halting this increase, Andy Burnham, a prominent figure in government, stated that "everything that might help people in very difficult times" is under review. He acknowledged the financial constraints, asking, "How many can I afford? What can we do given the state of the public finances?"

Burnham also described the nation as heading towards an energy crisis, noting the challenging prices at the pump and for domestic energy. He emphasized that while he is "doing what I can," the situation is difficult, underscoring the importance of addressing the Middle East situation. He mentioned discussions with the U.S. President regarding the need to reopen the Strait of Hormuz as an "urgent international priority."