What's happening to UK petrol and diesel prices?

An important development from the financial markets: What's happening to UK petrol and diesel prices? 7 minutes ago Share Save Add as preferred on GoogleFaarea MasudBusiness reporterGetty ImagesMotorists in the UK have faced higher fuel costs since the US-Israel war with Iran began on 28 February. The conflict has disrupted the production and transportation of energy across the Middle East, and at some points has stopped it entirely as a result of missile strikes and drone attacks.

The RAC motoring group has warned that prices at the pump could keep rising if there is no resolution to the conflict. How do wholesale oil prices affect the cost of petrol and diesel at the pump? Crude oil is a key ingredient in petrol and diesel, which means that higher wholesale costs make filling up a car more expensive.

Economic Details

Analysts say every $10 (£7. 53) increase in the oil price pushes up pump prices by roughly 7p a litre. Since the war began, the price of a barrel of Brent crude – the global benchmark for wholesale oil prices – has been very volatile, jumping from $73 to $126 a barrel at one point, the highest since Russia's full-scale invasion of Ukraine.

That put the cost of filling a typical family car with petrol up by around £14. A tank of diesel became £27 more expensive. What has happened to petrol prices in the UK?

The price of petrol reached 158. 5p a litre on 19 May, the highest since the war began. The previous high was seen in mid-April, after which prices fell for a time before starting to increase again.

Analyst Views

The RAC said it expected unleaded petrol to rise to at least 160p a litre in the coming weeks unless there was a "dramatic and sustained drop" in the price of oil. It thought the outlook was a little better for diesel drivers. However, petrol and diesel prices remain well below the levels reached in summer 2022 following Russia's invasion of Ukraine, when petrol reached 191.

5p a litre and diesel hit 199p. Because transporting oil is a slow process, price movements in the wholesale markets take about a fortnight to show at the pump. Fuel retailers have denied accusations of price gouging during the conflict.

The official markets regulator investigated these claims and said that profit margins were "broadly unchanged" between February and March. A government scheme called Fuel Finder lets drivers compare the cost of fuel offered by petrol stations across the UK. No evidence of widespread fuel price-gouging, watchdog saysDrivers can compare fuel prices at different petrol stations - how does it work?

Financial markets are tracking the development closely as investors assess the likely impact.