UK Petrol Prices Rise 2.4p in May as Iran War Pushes Fuel Costs, June 05

UK drivers faced mixed fuel prices in May 2026 as petrol rose 2.4p per litre while diesel fell 4.5p per litre, according to RAC Fuel Watch data. The divergence stems from higher US demand for petrol and lower European heating oil demand, both driven by wholesale market shifts tied to the ongoing Iran war and Strait of Hormuz disruptions. Inflation remains above the Bank of England’s 2% target at 2.8% in April, with fuel costs a key driver.

Petrol Prices Rise While Diesel Slips

Unleaded petrol averaged 159.4p per litre at the end of May, up 2.4p from 157p in April. Diesel fell to 183.9p per litre from 188.4p, a drop of 4.5p. For a typical 55-litre family car, petrol drivers paid an extra £1.32 per fill-up while diesel drivers saved £2.50 per tank. Supermarket petrol was 4p cheaper at 155.6p per litre, but supermarket diesel remained only 1.4p below the UK average at 182.5p.

Wholesale Costs Drive the Divergence

On 14 May, delivered petrol cost retailers 123.5p per litre before margin and VAT, while diesel was 133.3p. Higher US petrol demand mid-month pushed wholesale prices up, while reduced European heating oil demand—refined from the same crude barrel section as diesel—pushed diesel wholesale costs down. Brent crude fell below £100 per barrel in the final week of May, but the pump price gap between petrol and diesel remained 25p.

Iran War Keeps Fuel Costs Elevated

Before the US-Israel war began on 28 February 2026, UK petrol cost around £1.32 per litre and diesel £1.41 per litre. Now petrol stands at £1.57 and diesel at £1.89 per litre. The war has closed the Strait of Hormuz to most commercial traffic, disrupting 20% of global oil and gas transport. UK Parliament debated fuel cost support for farmers on 4 June due to these pressures.

Inflation Pressure and Rate Uncertainty

UK inflation rose to 2.8% in April, above the Bank of England’s 2% target. The central bank warned inflation could reach 6% in a worst-case scenario due to the Iran war. The energy price cap fell £117 annually from April to June, but the next cap effective 1 July is expected to be higher. UK fuel prices are tracked by 7,782 petrol stations and 7,855 diesel stations reporting to the government’s Motor Fuel Transparency API.

Final Thoughts

UK fuel prices remain volatile due to the Iran war and Strait of Hormuz disruptions. Petrol drivers face higher costs while diesel drivers saw May relief. Inflation pressure may keep prices elevated through July.

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