Cost of Iran oil crisis on millions of UK drivers reaches ‘unwelcome milestone’
The cost of the Iran oil crisis to motorists in the UK has reached an “unwelcome tipping point” in just over a month, new analysis shows.
Analysis by the RAC Foundation estimates that the rise in fuel prices since the conflict in the Middle East began on February 28 has led to motorists paying half a billion pounds more for petrol and another £1.5 billion for diesel.
The analysis also shows that the additional VAT charged by the Treasury due to fuel being more expensive exceeded £336 million.
Figures are based on average daily pump price increases and last year’s fuel consumption rate.
VAT applied to road fuel is collected at a rate of 20 percent in addition to the total price of product and fuel tax; the latter stands at around 53 pence per liter.
RAC Foundation director Steve Gooding said: “This is another unwelcome turning point for millions of motorists as the financial pain caused by the war in the Persian Gulf continues to mount.
“As ministers themselves have warned, the economic effects of the conflict can linger for months after it has ended.
“Diesel vehicle owners have borne the brunt of the increases in pump prices, many of whom will be commercial users who have little choice but to pass the costs on to their customers.
“Whether we are drivers or not, we are all feeling the pinch of high fuel prices on the forecourt.”
Oil prices, which significantly affected wholesale fuel prices, rose rapidly due to Iran strangling tankers passing through the Strait of Hormuz.
The average price of a liter of petrol and diesel in the UK is 24p and 47p higher respectively than before the war, despite a slight decline in recent days.
