What's happening to UK petrol and diesel prices now the US and Iran have a deal?
What's happening to UK petrol and diesel prices now the US and Iran have a deal?11 hours ago Share Save Add as preferred on GoogleFaarea MasudBusiness reporterGetty ImagesMotorists in the UK could be facing cheaper fuel...
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Breaking news from the markets: What's happening to UK petrol and diesel prices now the US and Iran have a deal? 11 hours ago Share Save Add as preferred on GoogleFaarea MasudBusiness reporterGetty ImagesMotorists in the UK could be facing cheaper fuel prices as a result of the US and Iran reaching an agreement to end their war. When the conflict began on 28 February, fuel costs jumped as the war significantly disrupted the production and transportation of energy across the Middle East.
However, in recent weeks they have fallen and the framework deal reached between the US and Iran has raised hopes they will fall further. Motoring group the RAC noted that oil prices have already fallen on news of the deal which "should quickly bring prices down at the pumps". How do wholesale oil prices affect the cost of petrol and diesel at the pump?
Economic Details
Crude oil is a key ingredient in petrol and diesel, which means that higher wholesale costs make filling up a car more expensive. 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. Before the conflict, Brent was about $70 a barrel, but the Iran war saw it peak at above $120. The price has been slipping in recent weeks and following news of the framework deal it fell to around $83 a barrel.
What has happened to petrol prices in the UK? According to the RAC, the price of petrol reached an Iran war peak of 159. 53p a litre on 28 May, while diesel's highest price during the conflict was 191.
Analyst Views
54p a litre on 15 April. In the last week, the price of petrol has come down nearly 2p to 156. 37p a litre, with diesel reducing by 3p to 177.
The RAC says it now costs £97. 22 to fill up a 55-litre family car with diesel – £18. 91 more than it did on 28 February, and £85.
74 for a tank of petrol – £12. 68 more than at the start of the conflict. RAC head of policy Simon Williams said: "The oil price has already dropped as a result of the US Iran deal to open the Strait of Hormuz which is good news for drivers as this should quickly bring prices down at the pumps.
Economists are analysing what the news means for the markets.
