The RAC (Royal Automobile Club) announced on Monday (September 28) that the price of diesel at fuel stations in Britain has reached 199.18 pence due to the war between the United States and the Israeli regime against Iran. This figure surpasses the previous record of 199.09 pence set in June 2022. The rise in diesel prices not only pressures drivers' costs but also increases logistics and transportation costs, as this fuel is widely used in industry and agriculture.
Factors Affecting Diesel Prices
Simon Williams, the policy director of the company, stated in a statement that the cost of filling the tank of an average family car is about £110, which is £31 more than before the onset of the conflicts in the Middle East. He also added that only a sustained decrease in oil prices over a few weeks could help reduce fuel prices at the pumps. The government could also alleviate the burden of costs on drivers by reducing fuel duties or VAT.
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Impact on the Economy and Market
Fuel prices are considered one of the main factors of inflation in Britain. In August, inflation in the country reached its highest level in the past five months, putting additional pressure on consumers facing a long-term cost of living crisis. Global diesel prices have surged in recent months due to reduced global refining capacity and supply disruptions caused by conflicts in the Middle East and Ukraine.
Last week, following support from Donald Trump, the President of the United States, for a plan to ban diesel exports, prices saw a significant rise once again. This action prompts importers like Britain and other European countries to seek alternative sources. Britain has four active oil refineries with a total capacity of one million barrels of crude oil per day, indicating a reduction in capacity compared to previous years.
According to a recent report from the UK Energy Statistics Summary, diesel imports will account for about 40% of the country's total petroleum product imports by 2025, with the U.S. contributing 31% of that. Interestingly, Britain imports about 55% of its diesel consumption, and diesel prices in the country are still lower than in many European markets.
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