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Possible US ban raises supply risks for the UK

The UK government is holding talks with Washington over the possibility of a US diesel export ban and is also preparing its own stockpiles in case of any disruption. John Healey told BBC News that diesel prices in the country had risen to “extreme” levels, adding that the risk could feed directly into pump prices because about a third of the UK’s diesel imports come from the US.

Healey said during the Labour Party conference in Liverpool that the government was working closely with the US side, and that easing the conflict in the Middle East through diplomacy was important to reduce financial pressure. US President Donald Trump said over the weekend that they were seriously considering banning diesel exports.

Prices climb to record levels

According to data from RAC, the average price of diesel in the UK rose to 199.33 pence per litre on Monday, setting a new high. That surpassed the previous peak of 199.09 pence seen in June 2022 after Russia's full-scale invasion of Ukraine.

Petrol prices are also still rising. The average price of petrol in the UK currently stands at 174.23 pence per litre.

How supply pressure and tax changes are affecting the market

Over the past seven months, the war in Iran has severely disrupted wholesale oil production and transport in the region. Combined with the impact of the Russia-Ukraine war on energy flows, global fuel prices have climbed further and the UK's sensitivity to external shocks has become more visible.

According to US sources, the Trump administration has put the export ban on the agenda in an effort to lower prices for domestic consumers. While the move is aimed at easing pressure in the home market ahead of key midterm elections, it could create additional cost pressure in import-dependent countries.

  • About a third of the UK's diesel imports come from the US.
  • The diesel price of 199.33 pence has surpassed the previous record of 199.09 pence.
  • Petrol is trading at 174.23 pence per litre.

Fuel tax changes are also being watched

In the UK, a fuel duty freeze introduced under the Conservative government in 2022 is expected to end later this year. Under the current schedule, the tax is due to rise by 3 pence in January and by another 2 pence in March.

Healey said the government was aware of the pressure on the cost of living ahead of the budget he plans to present on October 28. But the current picture suggests the UK fuel market could face significant volatility in the short term, driven both by a possible US export restriction and by upcoming tax increases.

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