US Politics - Diesel Prices Set to Hit Record High Amidst Geopolitical Tensions
Soaring fuel costs are squeezing motorists as the ongoing conflict in the Middle East impacts global oil prices and contributes to rising inflation.
Motorists are bracing for a new record high in diesel prices this weekend, with forecourt costs nearing £2 a litre. This surge is driven by escalating oil prices, which have climbed above $100 a barrel since the onset of the conflict in the Middle East. The RAC reports that the average price of a litre of diesel has reached 198.32p, marking a 14.5p increase this month alone and a significant 55p rise since late February.
The financial impact on drivers is substantial. Filling a typical 55-litre family car with diesel now costs approximately £109, a £30 increase compared to pre-conflict prices. The cost of petrol has also seen a sharp rise, with unleaded fuel averaging 173.6p per litre, its highest point in four years.
Experts warn that the situation could worsen, with diesel prices hovering near the previous record high of 199.09p set in June 2022 following Russia's invasion of Ukraine. Hundreds of petrol stations are already charging over £2 a litre for diesel.
RAC head of policy, Simon Williams, stated that the record price "will almost certainly be surpassed over the weekend as retailers continue to pass on the increases they're seeing when they buy new supply." The recent spike in oil prices to over $108 a barrel is attributed to the ongoing conflict and its impact on global supply chains, particularly the effective closure of the Strait of Hormuz. This has been a key factor contributing to the UK's inflation rate, currently at 3.1 percent and projected to rise.
The rising fuel costs are expected to intensify pressure on political parties regarding fuel duty. Plans for a Fuel Duty hike in the upcoming budget, which would add 3p per litre in January and another 2p in March, are facing scrutiny as they coincide with expected increases in household energy bills.
Furthermore, the elevated cost of diesel has broader economic implications, as it forms the backbone of the haulage sector. Increased diesel expenses for transport companies are likely to be passed on to consumers, leading to higher prices for goods on supermarket shelves.