Diesel prices have already plunged since the height of the Iran conflict
Millions of motorists could soon be more than £12 better off every time they fill up their cars.
Diesel prices have already plunged since the height of the Iran conflict and experts say there is scope for further cuts in the coming weeks. Figures remain well above pre-war levels, however the recent reductions with more to come offers some reasons for optimism. The RAC says the average price of diesel has fallen by 13.65p a litre since peaking at 191.54p on April 15.
For a typical family car with a 55-litre fuel tank, that amounts to a saving of around £7.50 every time drivers fill up compared with the height of the crisis. And there could be more relief to come.
The RAC believes diesel prices should continue falling to below 170p a litre. From the current average of 177.89p, that would represent a further reduction of almost 8p a litre, saving another £4.40 on a 55-litre tank. Taken together, diesel drivers could end up around £12 better off every time they fill up than they were at the peak of the fuel price spike earlier this year.
Petrol motorists are also seeing prices move lower, although the savings are less dramatic. The average price of unleaded has fallen 1.7p in the last week to 156.37p a litre and is now 3.16p below its recent peak of 159.53p recorded on May 28.
That equates to a saving of around £1.75 on a typical tank. The latest reductions come as energy markets become increasingly optimistic that tensions in the Middle East may be easing.
US President Donald Trump has suggested a deal with Iran could be close, while Iranian officials have also struck a more conciliatory tone in recent days. At the centre of the negotiations is the Strait of Hormuz, one of the world’s most important shipping routes through which around a fifth of global oil supplies pass.
Earlier this year, fears that the waterway could be disrupted sent oil prices sharply higher, pushing up the cost of petrol and diesel. Now, hopes that any agreement will guarantee the free flow of oil tankers through the strait have helped calm markets and pull crude prices lower.
That is already feeding through to lower wholesale fuel costs and cheaper prices at the pumps. RAC head of policy Simon Williams said: “Drivers will be relieved to see prices at the pumps now moving steadily down in response to a much lower oil price.
“We expect unleaded to fall another few pence a litre from its current average of just over 156p in the next week or so. Diesel’s downward trajectory is far faster having dropped more than 3p in the last week and nearly 14p since its conflict peak of 191.54p at the end of May. Our analysis of the wholesale market shows it should continue to fall to below 170p a litre.”
The figures underline just how sharply fuel costs rose during the turmoil. At the end of February, before tensions escalated, petrol averaged 132.83p a litre and diesel stood at 142.38p.
By mid-April, diesel had rocketed to almost £1.92 a litre – nearly 50p higher than at the end of February – while petrol climbed above 158p. Although prices remain well above their pre-conflict levels, the recent downward trend offers hope that the worst of the fuel price shock is over.
For households preparing for summer holidays and long-distance journeys, further falls at the pumps would provide a welcome boost to stretched budgets.
