UK diesel average eases to 197p as petrol falls

Waller points to tanker insurance and limited refining capacity

UK forecourts averaged 197p per litre for diesel on November 11, only 2p below the record £2 reached in October, despite a sharp fall in oil prices, the AA reported.

Petrol averaged 168p, down 6p from its early-October peak of 174.7p. The AA said the October peak was the highest since August 2022.

The AA described the diesel situation as “dismal,” while The Guardian reported that high fuel prices were placing huge financial strain on households and businesses.

At a conference in London this week, Christopher Waller, a US Federal Reserve governor, said energy prices could remain “elevated.”

Waller said a rise in tanker traffic through the Strait of Hormuz had increased the cost of moving oil. The insurance now needed for ships making the passage, together with ship-to-ship transfers intended to guard against Iranian attacks, were reportedly boosting oil prices by $20 to $30 a barrel, Waller said.

Waller also said limited refining capacity and other constraints were affecting diesel production. He said elevated prices for diesel in the United States were not expected to moderate as readily as crude oil prices would in a more peaceful Middle East.

In the UK, the wholesale cost of unleaded fell from 77p a litre to 68p in the second half of October and now sits below 62p, the AA said. The AA said another 10p reduction could be on the cards for petrol because wholesale costs were falling.

As a rule of thumb, each 5p reduction at the pump knocks £2.75 off the cost of filling a typical car’s 55-litre tank.

Discounts were not evenly available, Luke Bosdet, the AA’s spokesperson on pump prices, said. Finding petrol below 160p was “hit and miss,” he said, although the government’s fuel finder data showed it was already possible in certain areas.

“London and the south-east stand out for not showing any fuel stations with the bargain petrol prices of northern England, Wales and even Scotland,” Bosdet said. He added that some forecourts were still charging close to the early-October peak and called that “unforgivable” given how much wholesale costs had fallen since mid-October.

The average diesel price, meanwhile, fell only 2p a litre from its all-time record of £2 even though the wholesale cost dropped by around 4p a litre since mid-October. Bosdet said a further small reduction at the pump was possible.