RAC warns filling an average family car now costs almost £110

The RAC said the average price of a litre of diesel hit 199.18p on Monday, eclipsing the previous all-time high of 199.09p set in June 2022. The motoring organisation warned that prices could soon top the £2 mark after President Donald Trump rejected a proposed seven-day peace deal from Iran that would have reopened the critical oil and gas shipping route through the Strait of Hormuz.

Simon Williams, the RAC’s head of policy, said the price of diesel had “entered new uncharted territory.” He said the cost of filling an average family car with diesel is now almost £110, which is £31 more than it was at the start of the US-Iran conflict in February.

“This spells pain not only at the pumps for drivers, but for everyone who buys goods or services that rely on diesel lorries and vans,” Williams said. “Undoubtedly, these increased costs will be passed on to consumers.”

Petrol prices have also continued to rise, with the average price of a litre hitting 174.13p, 41p more than at the start of the war. The RAC said the cost of filling a full tank of petrol is nearly £96.

Trump has said he is “very seriously” considering a US diesel export ban to try to curb soaring domestic prices, and has urged Ukraine’s President Volodymyr Zelenskyy to pause strikes on Russian oil refineries over concerns they could further push up prices.

Dr. Jonathan Owens, an operations and supply chain expert at the University of Salford, said the consequences of soaring fuel prices “could reach almost every part of UK economic life: supermarkets, manufacturing, construction, agriculture, e-commerce and countless other sectors that depend upon road freight.”

“So, a geopolitical event and potential policy decision thousands of miles away can travel rapidly through our supply chain: from a refinery to a tanker, to a UK haulier, to a distribution centre, to a supermarket shelf and ultimately, the price will be paid by the consumer,” Owens said.

The RAC urged the government, which has extended a 5p cut in fuel duty until the end of the year, to consider expanding the discount or reducing VAT to help motorists at the pump. Williams noted that “as things stand another 5p a litre will be loaded on to pump prices by the spring if the current fuel duty cut is fully reversed as planned” and that “VAT receipts from fuel are also extremely high.”