UK motorists have spent an additional £2 billion on fuel since the surge in pump prices sparked by the Iran conflict. Data from the RAC Foundation reveals a £500 million increase in petrol costs and a £1.5 billion rise in diesel expenses within a little over a month.
As of Thursday, the average petrol price stood at 156.98p per liter, down from its peak of 158.31p, while diesel was priced at 188.53p per liter, down from 191.54p. Before the Iran conflict in late February, petrol averaged 132.83p per liter, and diesel stood at 142.38p per liter.
The analysis indicates that the Treasury has collected over £336 million in additional VAT, based on daily pump price hikes and last year’s fuel consumption rates.
Steve Gooding, director of the RAC Foundation, expressed concern over the financial burden on motorists due to the ongoing conflict in the Persian Gulf. He highlighted the prolonged economic impact even after the conflict concludes, with diesel vehicle owners facing the brunt of price increases.
The closure of the Strait of Hormuz has led to a surge in petrol and diesel prices, driven by a sharp increase in crude oil prices. Crude oil, the key raw material for fuel production, surpassed $126 (£94) a barrel on Thursday.
Despite a later drop to just over $121 (£89) a barrel, escalating tensions between the US and Iran have fueled fears of renewed US military action. UK households are also expected to face higher energy costs this summer as a result of the conflict, with Ofgem set to announce the next price cap level for July in the coming month.
