The Iran war’s impact on British households at the petrol forecourt has reached a milestone that commands attention on any economic dashboard. Average diesel prices hit 182.8p per litre at UK forecourts on Tuesday, according to RAC data, meaning filling a standard 55-litre family car now costs £100.52.
That figure, breached for the first time since December 2022, represents a 40p-per-litre increase since February 28, the day US and Israeli strikes began. Petrol has risen 20p per litre over the same period to 152.8p, a slightly smaller but still substantial increase for the roughly 34 million cars on British roads.
The mechanism is straightforward and unavoidable. The Strait of Hormuz handles approximately 20% of global oil supply, and Iran’s effective blockade of that waterway since the start of the conflict has removed significant daily supply from global markets, pushing up wholesale prices that feed directly into what appears at the pump.
Rachel Reeves confirmed this week that the government has extended the fuel duty freeze until September, but stopped short of any additional intervention for drivers in the short term. Her reasoning reflects a genuine dilemma: cutting fuel duty universally would reduce costs but would also cost fiscal headroom at a moment when the government is trying to meet borrowing targets that are already under pressure.
British Gas has updated its July price cap forecast to £1,929 per year, up from the April cap of £1,641, a projected increase of £288 or 18% in the space of a single quarter. That forecast will land on households that are currently enjoying a brief reduction in their energy bills, a reduction that Cornwall Insight and other analysts say will be entirely reversed and then exceeded by the time summer ends.
The government’s five-point plan, which Starmer outlined on Wednesday, combines existing measures including the April price cap reduction and prescription price freeze with the promise of targeted future support if the crisis deepens. The key phrase is “if necessary” which tells anyone paying attention that blanket emergency support is not coming unless conditions deteriorate significantly further.