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Petrol and diesel prices have both hit the highest levels since 2022 as the conflict in the Middle East continues to impact drivers’ finances.
The average price of a litre of petrol now stands at 169.68p, according to the RAC motoring body, while diesel has risen to 191.68p.
The cost of filling up a vehicle is back to where it was after Russia launched a full-scale invasion of Ukraine more than four years ago.
The US-Israel war with Iran has severely disrupted the production and transportation of oil across the region.
Motor fuel prices fell back when the US and Iran agreed in June to a framework deal to end the fighting but have started rising again as tensions resurface.
With the price of wholesale oil back above $100 a barrel, Simon Williams, head of policy at motoring organisation RAC, said “there’s no end in sight to high pump prices” for drivers.
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. The price of petrol and diesel is also heavily influenced by demand and refining capacity.
Analysts say every $10 (£7.44) per barrel 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.
Generally speaking, news of further conflict drives the price up while hopes of an end to the war pushes the price down.
Before the conflict, Brent was about $70 a barrel, but the fighting saw it peak at above $120.
In early July, after the framework deal was signed, prices fell back to near the $70 a barrel mark.
When the peace talks collapsed, the price climbed back up again to above $100 a barrel. It fell back for a few weeks but is once again over the $100 mark after a fresh escalation in hostilities.
What has happened to petrol and diesel prices in the UK?
Just a few weeks ago in July, the average price of petrol was 150.59p per litre and diesel was 164.52p.
They have since rebounded. At 191.68p for a litre of diesel, the price is getting closer to the record high of 199.05p seen in June 2022.
Meanwhile, petrol has hit an average 169.68p a litre. It remains below a peak of 191.5p during the summer of 2022.
Williams said: “This takes the cost of filling up a 55-litre family car with unleaded to over £93 and diesel to more than £105.”
Because transporting oil is a slow process, price movements in wholesale oil 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.
In May, the then Prime Minister Sir Keir Starmer said a planned 5p increase in fuel duty due in September would be postponed until the end of December because of the conflict.
RAC has said there is “a very strong case” for leaving fuel duty at its current level, at least until the end of the Parliament.
Why has the Iran war had a big impact on oil prices?
The Middle East conflict sent global oil prices soaring as it effectively closed the Strait of Hormuz — one of the world’s key water transport routes for oil, liquid natural gas and other essential commodities — limiting global supplies.
About 20% of the world’s oil and liquefied natural gas normally passes through the waterway.
Even if a deal is agreed to reopen the strait, experts warn it will take time before normal levels of shipping through the Strait of Hormuz resume, and the impact of the war will continue to affect the global economy for potentially months to come.
Where does the UK get its oil and gas?
The UK is heavily reliant on oil and gas imports, with the majority coming from the US and Norway.
The price of oil on the global market determines how much the UK pays for it.
Although the UK does get some oil from the North Sea, most of that is exported for refining elsewhere.
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