Healey says UK preparing for diesel export ban as fuel prices hit record

Diesel average reaches 199.18p a litre, RAC reports

UK Chancellor John Healey confirmed on Monday that his government is in direct talks with US authorities over a potential ban on diesel exports and has begun preparing for that outcome, as UK pump prices climbed to record levels. Healey disclosed the preparations on the sidelines of the Labour Party’s annual conference in Liverpool.

Diesel prices in the UK reached a new high on Monday due to supply pressures stemming from the US-Israel conflict with Iran and Russia’s war with Ukraine, according to BBC News.

The RAC motoring organisation reported that the average price for a litre of diesel reached 199.18p on Monday, surpassing a previous high of 191.5p recorded in June 2022 after Russia launched its full-scale invasion of Ukraine. Petrol prices also continued to rise, with a litre currently costing 174.13p.

Healey acknowledged that UK diesel prices were at “extreme” levels and said the government was preparing for a ban. “We’re also making the provision that we may need to and we have our own stocks in the UK,” he told BBC News, adding: “We work very closely with the Americans.”

“In the end, we’re also working with the Americans where we can try and put in place what will solve this, or at least significantly ease it, which would be a diplomatic settlement [and] an end to the fighting with Iran,” Healey said.

The UK depends on the US for around a third of its diesel imports, and a ban would send prices even higher, according to BBC News. US sources suggest Trump is considering a ban to attempt to bring down prices for domestic consumers ahead of the critical midterm elections.

Fuel prices are rising globally, and Trump has threatened to ban diesel exports, stating at the weekend: “We’re thinking about it very seriously.” The BBC has contacted the White House for comment.

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, according to BBC News. Russia’s war with Ukraine has compounded the pressure. The RAC said UK diesel prices had entered “uncharted territory” and served as a reminder of “just how exposed the UK is to events occurring far away.”

Healey said he was “very aware” of these cost-of-living pressures as he prepared what he called a “breathing space” Budget scheduled for 28 October. A freeze on fuel duty, first implemented by the Conservative government in 2022, is due to expire at the end of the year. Duty is scheduled to increase by 3p in January and a further 2p in March.

“Fundamentally, what we need is a settlement in the Middle East,” Healey said. “We need an easing of the pressure of costs on business, the costs on households and on ordinary families that we see at the pumps in the most extreme level today for diesel.”