UK petrol prices fall to their lowest since the opening days of the Iran war, with the average cost of unleaded dropping to 151.98p a litre as of 26 June, according to the Competition and Markets Authority (CMA) and motoring groups. The framework deal between the US and Iran has accelerated a retreat in oil prices that was already under way, but drivers filling up this week are still paying meaningfully more than they were before the fighting began.
How far have petrol and diesel prices come down?
The RAC reported that petrol averaged 151.98p a litre on 26 June, down 2p in a single week. Diesel fell 4p over the same period to 168.64p. Those moves leave the cost of filling a 55-litre family car at £83.59 for petrol and £92.75 for diesel.
Neither figure is one to celebrate without qualification. Petrol is still £10.50 more expensive per tank than it was at the end of February, before the conflict started. Diesel is £14.40 more. Progress, then, but not a return to normal.
Both measures remain well below the peaks of summer 2022, when Russia’s invasion of Ukraine drove petrol to 191.5p a litre and diesel to 199p.
UK petrol prices fall in step with a sharp retreat in crude
The mechanism is straightforward: crude oil is the primary ingredient in petrol and diesel. According to analysts, every $10 increase in the oil price pushes pump prices up by roughly 7p a litre. So the direction of Brent crude matters enormously.
Before the war, Brent crude traded at around $70 a barrel. The conflict drove it above $120 at its peak. Since the framework deal was signed it has fallen sharply, recently trading at approximately $71.99 a barrel, a drop of more than 10% in a single week, described as the largest weekly fall in a month. WTI crude, the US benchmark, has tracked a similar path, hitting a 17-week low at approximately $69.23 a barrel on a comparable 10% weekly decline.
That recovery in oil supply has been driven by a sharp increase in shipments through the Strait of Hormuz. Roughly 20% of the world’s oil and liquefied natural gas normally transits the waterway; the war effectively closed it. Experts caution that a full return to normal shipping flows will take time, and the economic aftershocks could persist for months.
Because transporting oil is a slow process, wholesale price moves take about a fortnight to feed through to the forecourt. The RAC’s head of policy, Simon Williams, said prices were moving in the right direction but not fast enough: ‘Drivers really ought to see average prices of below 150p for unleaded and below 160p for diesel in the next week or so.’
Why retailers are under pressure to pass savings on faster
The RAC’s point about the pace of pass-through has structural roots. The CMA’s July 2023 road fuel market study found that competition in the retail fuel sector had weakened since 2019, leaving drivers paying more at any given level of wholesale prices. Fuel retailers have denied price-gouging during the conflict, and the official regulator said it had found no evidence of retailers changing their pricing strategies to exploit the crisis. But the underlying structural concern identified by the CMA predates the war.
One counter to that pressure is Fuel Finder, the government’s statutory open data scheme requiring petrol stations to publish their prices in real time. The AA’s Luke Bosdet credited the scheme with helping accelerate the current price falls. The government confirmed the statutory implementation of Fuel Finder on 30 October 2024, following the CMA’s recommendation.
What about fuel duty?
On 20 May, Prime Minister Sir Keir Starmer announced that a planned 5p increase in fuel duty, due in September, would be postponed until 31 December because of the conflict. The picture beyond that date is more layered. Under GOV.UK fuel duty rates for 2026-27, the temporary 5p-per-litre cut first introduced in March 2022 will gradually reverse: rising by 1p from 1 September 2026, then 2p from 1 December 2026, and a further 2p from 1 March 2027.
That schedule means drivers should enjoy a relatively low-duty environment for now. Whether the wholesale tailwind lasts long enough to offset those future increases is the question worth watching into the autumn.
