The average price of a litre of diesel at UK pumps has soared to **198.32p**, according to the RAC motoring body, placing it just shy of its all-time high.
This surge is igniting fresh concerns about the cost of living crisis and inflationary pressures.
**Key Details:**
* **Current Price:** 198.32p per litre.
* **Previous Record:** The highest recorded price for diesel was **199.59p per litre**, set in July 2022. Today’s figures put it within a penny of that peak.
* **Impact:** Higher diesel prices disproportionately affect businesses, particularly in logistics, haulage, and construction, where diesel is the primary fuel. These increased operational costs often translate into higher prices for goods and services for consumers, further fuelling inflation. Households with diesel vehicles also face significant increases in their everyday commuting costs.
**Factors Contributing to the Rise:**
1. **Global Oil Prices:** While crude oil prices have moderated from their absolute peaks, they remain elevated compared to historical averages.
2. **Refining Margins:** A significant driver is the high cost of refining crude oil into diesel. Europe has historically relied on Russian diesel imports, and sanctions have created a structural deficit, pushing up refining margins for the fuel.
3. **Weak Sterling:** As oil is priced in US dollars, a weaker pound sterling makes dollar-denominated oil purchases more expensive in the UK.
4. **Fuel Duty and VAT:** These taxes still constitute a substantial portion of the pump price, magnifying the impact of rising wholesale costs.
Analysts suggest that without significant changes in global supply dynamics or a strengthening of the pound, diesel prices are likely to remain elevated, posing a persistent challenge to both consumers and the broader economy.
