UK Petrol Braces to Climb as Oil Tops $85
The escalation in the Gulf has driven oil to a one-month high above $85 a barrel, and British drivers and households will feel it. Pump prices, already near 151p a litre for petrol and among the highest in over two years, are set to rise as the war premium rebuilds, and the wholesale gas price that sets energy bills is exposed to the same shock. The 5p cut in fuel duty, frozen to the end of this year, is the only thing holding pump prices down.
The transmission from a Gulf chokepoint to a British forecourt is quick: even the threat of disruption puts a premium into crude, which reaches pumps within a fortnight and energy bills within weeks, and a 20% toll on Hormuz shipping, if it holds, would add to it. The timing is punishing for the incoming government, which inherits stretched public finances and a chancellor-in-waiting pledged to discipline; a fresh inflation shock would narrow its options and reopen the argument over the fuel-duty freeze. The Bank of England would face the same bind that has run through this whole conflict — oil-driven inflation against a slowing economy — complicating any path to lower interest rates. For households the practical read is that the recent easing in pump prices has firmly reversed. Watch where oil settles, whether ministers signal more duty relief, and the read-through to the next inflation figures.