UK diesel price reaches record £2 a litre as government says supplies are robust

UK diesel reached a record average of 200.01p a litre on Friday, 2 October, according to the RAC, pushing the cost of filling a 55-litre tank to about £110. The milestone raises costs for drivers and businesses across the country as the government discusses fuel supplies with international partners.

The previous UK average record was 199.09p a litre in June 2022, after Russia's invasion of Ukraine. The RAC says diesel is now 40.5% more expensive than it was on 28 February, when its average stood at 142.38p a litre. Its figures put the cost of filling a 55-litre diesel tank at £110.01, up £31.70 over that period.

What £2 diesel means for drivers and businesses

The RAC estimates that a diesel car averaging 45 miles per gallon now costs about 20p per mile to fuel. At 10,000 miles a year, its estimate is £2,020 in fuel costs. Those are illustrative calculations based on the reported average price and fuel economy; an individual driver's bill depends on mileage, vehicle efficiency and the price paid at a particular forecourt.

RAC head of policy Simon Williams said the increase would be challenging for commuters, haulage and delivery firms, businesses operating fleets and sole traders. He said companies may pass additional costs to customers. The RAC's warning describes a possible response to higher costs; the cited figures do not measure how many businesses have done so.

Why UK diesel prices have climbed

The RAC attributes the rise to disruption of fuel supplies during the Middle East conflict, including pressure on the Strait of Hormuz shipping route. The Guardian reports that the US-Israel war on Iran began disrupting supplies of crude oil and refined products from the Gulf in late February. These accounts explain the organisations' assessment of the price rise; they do not establish how long current prices will last.

The UK also depends on diesel imports. The Independent reports that imports account for nearly 55% of its diesel supply and that the US provides nearly a third of those imports. The RAC has warned that a possible US ban on diesel exports could add pressure. No such ban is established in the reporting used here, so its effect on UK prices remains uncertain.

Petrol has risen too, although its average remains below diesel's. The RAC put unleaded petrol at 174.71p a litre and the cost of a 55-litre tank at £96.09. The RAC Foundation estimates that, of a £2 litre of diesel, 86p goes to the Treasury through fuel duty and VAT. Its breakdown lists fuel duty at 52.95p a litre, with VAT charged on the product price and duty.

What ministers say about supply and fuel stocks

Transport minister Keir Mather told Sky News that the UK has diverse sources of diesel and resilience built into its supply system. As reported by The Independent, he said people should not be concerned about shortages. That is the government's assurance about supply, rather than a guarantee about future availability or prices.

Mather said ministers were working with US counterparts, the International Energy Agency and European partners to sustain diesel flows. Britain has joined discussions with European counterparts about whether to release fuel stocks, The Independent reported. Its account does not establish that a release has been agreed, how much fuel might be used or when any decision would take effect.

Jonathan Owens, a supply chain expert at the University of Salford, told The Independent that releasing emergency stocks could help maintain availability and give businesses time to adjust their logistics and sourcing. He also described those stocks as an insurance policy: drawing on them now would reduce protection against later disruption until they were replenished. A release, he said, would not resolve dependence on international energy markets or weaker refining capacity.

The Independent reports that, as a member of the International Energy Agency, the UK is required to hold oil stocks equal to at least 90 days of net oil imports. For now, the immediate change for motorists is the pump price: the RAC's average has passed the June 2022 record, while any decision on stock releases and any further effect on prices remain open.