Petrol prices across the UK have risen to an average of 154.65 pence per liter, the highest level since October 2023 and an increase of almost 20 pence since hostilities with Iran broke out six weeks ago.
Diesel has now reached an average of 186.75p per liter, a level not seen since November 2022, with some motorists reporting prices of over £2 per liter at individual filling stations.
The increase, representing an increase of more than 17 percent since the start of the conflict, is largely due to disruptions to global supply routes, particularly through the Strait of Hormuz, a critical chokepoint for international oil shipments. In the United States, average gasoline prices have risen more than 20 percent in the last month alone, from $3.45 to $4.16 a gallon, adding to the political pressure facing President Donald Trump ahead of November’s midterm elections.
However, there was some relief in markets on Wednesday after it was announced that a 14-day ceasefire agreement had been reached between Washington and Tehran. In response, the price of Brent crude oil fell sharply, falling by about 13 percent to about $95 (71 pounds) a barrel.
Despite the positive signals from the ceasefire, industry experts warn that relief at the pumps is unlikely to come quickly. Prem Raja, head of trading room at Currencies 4 You, noted that gasoline prices typically lag crude oil’s movements, meaning it will take some time for the recent drop in wholesale costs to filter through to gas stations.
Raja noted that assuming the ceasefire continues, prices are likely to be near or at their peak, but warned that the decline will be gradual. He pointed to disruption to traffic flows through the Strait of Hormuz as a factor that could increase prices in the short term and urged drivers to look for cheaper deals, particularly by avoiding motorway service areas and using local forecourts instead.
Tony Redondo, founder of Newquay-based Cosmos Currency Exchange, described the dynamic as a classic example of the so-called “rocket and feather” effect, where prices rise quickly but fall much more slowly. He pointed out that petrol prices could remain above 145p a liter throughout the summer even as wholesale costs stabilize and the risk premium on Middle East supply routes continues to weigh on the market.
Redondo also pointed out that the planned 5p reduction in the government’s fuel tax cut from September 2026 represents a further headwind for motorists, potentially offsetting any benefits from falling global oil prices. Meanwhile, he advised motorists to favor supermarket forecourts, which charge on average 4.4p per liter less than branded petrol stations.
Antonia Medlicott, founder and chief executive of London-based Investing Insiders, was cautious, arguing that the price increase was more a result of the market pricing in risk rather than an immediate shortage of supply. She noted that stabilization could come sooner than expected barring further escalation, but cautioned against expecting rapid relief at the pumps.
Medlicott highlighted the broader concern about household finances, noting that while individual price spikes may prove temporary, the cumulative impact of repeated shocks on everyday living costs can be both significant and lasting.
Perhaps the harshest warning came from Samuel Mather-Holgate, managing director and independent financial adviser at Swindon-based Mather and Murray Financial, who argued that petrol prices were likely to remain elevated for some time. He noted that Israel’s continued involvement in wider regional tensions was a source of ongoing market uncertainty, suggesting that lasting peace may still be some way off.
Mather-Holgate warned that volatility in oil markets would continue despite the ceasefire and did not rule out the possibility that fuel prices could reach £2 a liter even with peace talks on the horizon. His assessment is a reminder that the road back to cheaper fuel for British motorists could be a long one.
