Over the weekend, the prices of petrol and diesel surged once again due to the continuous spike in oil costs. According to recent data from the RAC, the national average for diesel surpassed 150p per litre, reaching 150.97p on Sunday, up from 148.35p on Friday. Similarly, the average price for unleaded fuel also increased, hitting 137.51p per litre on Sunday.
The rise in oil prices, which climbed to nearly $120 per barrel – the highest in four years, was fueled by ongoing conflicts in the Middle East. Although reaching $119 per barrel initially, the price later stabilized around $108 per barrel. Concerns over prolonged shipping disruptions intensified as major oil producers reduced supplies, leading to a surge in wholesale gas prices and raising fears of an imminent energy crisis affecting households, businesses, and governments.
The escalation in oil prices also impacted financial markets in Asia, resulting in significant declines. All eyes are now on market reactions in Europe, particularly in London, as they open for trading. Chancellor Rachel Reeves is set to participate in an emergency meeting with G7 finance ministers to address the soaring oil prices. Meanwhile, US President Donald Trump downplayed the price hikes, stating they are a minor cost for global peace.
The RAC provides a free online tool, Petrol Prices, allowing users to check the latest petrol and diesel prices by entering their postcode. Additionally, the RAC offers detailed information on national average fuel prices, including breakdowns for supermarkets and motorway stations. Recently, the Government introduced a new “fuel finder” initiative mandating all UK filling stations to report price changes for petrol and diesel promptly.
Amid the escalating Middle East conflict, fixed-rate mortgage costs have surged significantly. Industry experts at Moneyfacts reported an increase in the average two-year fixed residential mortgage rate to 4.87%, up from 4.84% on Friday. Similarly, the average five-year fixed residential mortgage rate rose to 4.98% from 4.96%. The number of available residential mortgage products decreased to 7,636 from 7,663.
The rise in fixed-rate mortgages is attributed to the surge in swap rates, reflecting the cost for lenders to secure fixed funding. Experts warn of impending economic challenges as a result of the conflict, with potential impacts on interest rates and global markets. Housing Secretary Steve Reed urged drivers not to panic amidst rising oil prices, emphasizing that the Government is closely monitoring the situation in Iran.
Motoring groups, including the RAC, cautioned that forecourt prices may increase further if the conflict persists, albeit remaining distant from the record-high prices seen in 2022. The RAC emphasized that while wholesale costs have surged, it typically takes a couple of weeks for these changes to reflect at the pump. Suggestions for drivers included maintaining refueling habits, reducing non-essential journeys, and adopting fuel-saving driving techniques to manage escalating fuel costs.