Middle East tensions fuel pump price increases in June

Drivers urged to shop around and use myRAC app to save when filling up

2 July 2025

Three months of falling pump prices have come to an abrupt end with tensions in the Middle East causing the average cost of petrol to rise by 2p last month, according to new analysis of RAC Fuel Watch data.*

Unleaded now costs 134.17p a litre on average, up 2p since 1 June, meaning the cost to fill a 55-litre family car stands at £73.79 (£1.07 more than at the start of the month). The price of diesel went up even more – by nearly 3p (2.8p) a litre, from 138.39p at the start to 141.21p at the end. This added £1.55 to the cost a household pays to fill a family car.

Supermarket prices saw below-average increases last month, with petrol up 1.3p from 128.96p to 130.26p, while diesel rose by 1.6p from 135.06p to 136.67p. But it’s once again drivers in Northern Ireland who benefit from the cheapest visits to the forecourt – a litre of unleaded there costs 128p on average, around 6p less than the average across the whole of the UK, with diesel at 134p.

The primary cause of drivers paying more at the pumps was the cost of a barrel of oil jumping from around $64 in late May to a high of almost $79 on 19 June, following escalating tensions between Israel and Iran. Fears that Iran – one of the world’s biggest oil-producing nations – might block oil exports along the Strait of Hormuz on its southern coast injected uncertainty into the market, pushing oil prices up. However, contrary to what was predicted by some analysts, the oil price has since fallen and ended the month at $67, only a few dollars more than it was at the start of June.

The RAC hopes that pump prices will now stabilise, meaning drivers don’t see any further immediate increases at forecourts this month. But much depends on the level of margin retailers decide to take on the fuel they sell to drivers. This is something of a concern as the Competition and Markets Authority’s latest report into the sector, published on Monday, once again called out high retailer margins and a lack of competition as reasons why pump prices aren’t lower.**

RAC fuel spokesperson Simon Williams said: “The arrival of summer has brought some wholly unwelcome increases to pump prices, with retailers wasting no time in putting them up following increased tensions in the Middle East. Unleaded and diesel are now both at their highest levels since late April, although we see no reason for further increases as wholesale prices have come back down again.

“July will be a telling month – will retailers halt further price rises, or even cut them if wholesale costs continue to slide? Or will drivers be stuck having to pay an elevated amount for the foreseeable future? This is particularly topical given it was only two days ago that the Competition and Markets Authority noted how weak competition within the fuel retailing market is.

“Thankfully, we’re a long way off the record pump prices of exactly three years ago – when the Russia/Ukraine conflict saw the average price of unleaded hit an unprecedented 191.53p a litre and diesel climb to 199.21p, with some retailers charging well in excess of £2 a litre.

“But given fuel represents a substantial chunk of most households’ monthly outgoings, it remains the case that drivers need to be guaranteed a fair deal every time they fill up. The creation of a government-backed Fuel Finder scheme by the end of this year should make it easier to find the cheapest forecourts. But just because the price is cheaper depending on where you buy it doesn’t mean it’s as low as it could be. That depends on retailers more accurately reflecting wholesale price drops and ending so-called ‘rocket-and-feather’ pricing.

“In the meantime, we strongly urge drivers to use a free mobile app such as myRAC to make sure they always pay the lowest rate possible for local fuel. Those that do can find some good deals, such as at a variety of supermarkets in Huddersfield that are charging 125.9p a litre."

The online RAC Fuel Watch resource has more information about the average price of petrol and diesel at the big four supermarkets and at motorway services. It also features graphs showing average prices since 2000.