Cornwall Insight projects 16% rise in UK energy price cap

UK opens diesel reserve talks with European allies

Forecaster Cornwall Insight projects a 16% rise in the quarterly UK energy price cap that would add £276 to the typical annual dual-fuel bill, taking it to £1,999. The Guardian reported that the cap already rose 4% this week, pushing the typical Great Britain household bill to £1,723 a year. Cornwall Insight is described in the Guardian’s reporting as the leading forecaster of UK domestic energy prices.

The household energy pressure comes as the UK faces a parallel squeeze at forecourts. The RAC motoring group said on Friday that the average diesel price reached 200.01p a litre, the first time the national average has crossed £2. The Guardian reported that the price of a litre at UK forecourts has risen 40.5% since late February, when the US-Israel war on Iran began disrupting supplies of crude and refined oil products from the Gulf, leading to cost increases across the economy. The cost of filling an average family car with diesel now stands at about £110, nearly £32 more than before the Iran war, according to the RAC.

The Guardian reported that the fresh high came after record fuel prices across Europe in recent weeks, which have ignited calls for political leaders to take action to protect consumers against rising cost pressures. The RAC’s figures measure the average cost of fuel at forecourts, but many forecourts have been selling diesel above £2 a litre for some time.

Simon Williams, the RAC’s head of policy, said: “This is a pump price threshold that no one wanted to cross.” He added: “This will be very challenging for households and companies that drive a lot of miles, from commuters, haulage and delivery firms, businesses with large fleets all the way through to sole traders. In a cruel twist, it’s diesel vehicles, which were once considered the most cost-effective option for lengthy journeys, that are now burning a hole in people’s pockets.”

Petrol prices are also continuing to climb. Unleaded averaged 174.1p a litre on Friday — a 31.5% increase since 28 February that takes the cost of a typical tank to about £96, just over £23 more than before the US-Iran conflict.

UK Transport Minister Keir Mather moved on Friday to head off panic at the pumps, saying the country was not facing a diesel shortage. His intervention came hours after US President Donald Trump threatened to cut off US supplies of the fuel. The Guardian reported that the Trump administration has told Germany and France to release their diesel stockpiles to help ease soaring global energy prices or face a US export ban.

On Thursday, the UK opened talks with European allies on releasing emergency diesel supplies. Dan Jørgensen, the EU commissioner for energy, said on Friday that Europe was discussing the diesel reserves issue with all members of the International Energy Agency, not only the US. The UK relies on the US for about 30% of its diesel, with the vast majority of remaining supplies coming from mainland Europe, and holds reserve supplies sufficient for 42 days.

The Guardian reported that inflation in the cost of road fuels has outpaced the surge in global oil markets due to a sharp drop in output from refineries damaged by war in the Middle East and in Russia. Before the Ukraine war, Russia provided between 10% and 15% of the world’s diesel supplies. Another 10% of global diesel supplies had transited the Strait of Hormuz from Gulf nations before Iran responded to the US-Israeli attacks by disrupting the strait.

Trump has pressed Ukrainian President Volodymyr Zelenskyy to halt Kyiv’s drone and missile attacks on Russian refineries so the damaged facilities can help relieve the global fuel squeeze, the Guardian reported.