UK motorists experienced the fastest monthly fall in diesel prices since 2000 in June, with the cost plunging by 17p a litre, according to the motoring group RAC. The dramatic drop comes after prices surged when the US-Israel war with Iran began on 28 February, severely disrupting energy production and transportation across the Middle East. But since the US and Iran agreed to a framework deal to end the fighting in June, prices have nosedived.
Crude oil, a key ingredient in petrol and diesel, has been highly volatile. Before the conflict, Brent crude was about $70 a barrel; it peaked at above $120, but has since dropped back to around $72 a barrel following the deal. Analysts say every $10 increase in the oil price pushes up pump prices by roughly 7p a litre.
“Diesel prices saw fastest monthly fall since 2000, dropping 17p a litre in June after Iran war peace deal.”
According to the RAC, the average price of petrol reached an Iran war peak of 159.53p a litre on 28 May, while diesel’s highest average price during the conflict was 191.54p a litre on 15 April. Over the month of June, the average price of diesel sank from 183.75p a litre to 167.14p a litre, while petrol dropped from 159.37p a litre to 151.40p a litre over the same period.
However, the RAC said prices are still much higher than before the conflict began when average petrol prices were 132p a litre and diesel 142p a litre. The RAC's head of policy, Simon Williams, said: "As things stand, petrol should dip under 150p soon and diesel ought to get to below 160p, but we would need the price of oil to fall further to see a return to the pre-conflict prices."
Despite the conflict, petrol and diesel prices remain below the levels reached in the summer of 2022 following Russia’s invasion of Ukraine, when petrol hit 191.5p a litre and diesel 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 said it had "not seen evidence of retailers actively changing their pricing strategies to take advantage of the crisis". A government scheme called Fuel Finder lets drivers compare the cost of fuel offered by petrol stations across the UK.
Motoring group the AA has said it expects pump prices to fall further, adding that "the timing is perfect for the start of the summer holidays". Luke Bosdet, the head of policy at the AA, said the group had been surprised at the s…