The average price of a litre of diesel in the United Kingdom breached £2 for the first time, hitting a record 200.01 pence on October 2, 2026, according to data from the UK’s Royal Automobile Club, lifting the cost of filling a 55-litre tank to £110.01, an increase of £31.70 from February 28.
Pressure on transport and logistics
Simon Williams, head of policy at the UK’s Royal Automobile Club, said the higher prices posed a challenge for households, transport and delivery companies, and organisations operating large fleets, noting that businesses may have to pass the additional costs on to customers. Road transport relies heavily on diesel, increasing the likelihood that the rise will feed through from forecourts to the prices of goods and services.
The cost of running a diesel car with average fuel economy of 45 miles per gallon reached about 20 pence per mile, pushing the annual fuel bill for a driver covering 10,000 miles to £2,020, according to the club’s estimates. The average price of a litre of unleaded petrol also reached 174.71 pence, putting the cost of filling a 55-litre tank at about £96.09.
Fuel adds to inflationary pressures
Data from the Office for National Statistics showed that motor fuel prices rose 23.0% in the 12 months to August 2026, after the price of diesel increased by 14.2 pence per litre between July and August, taking its average price to 181.8 pence. Fuel was the biggest driver of the rise in the annual consumer price inflation rate to 3.1% in August, from 2.9% the previous month.
Transport prices rose 4.6% year on year in August, compared with 3.6% in July, underscoring how quickly the fuel surge has fed through to one of the main components of the consumer price basket.
Bank of England monitors energy shock pass-through
The Bank of England kept its interest rate at 3.75% at its meeting ending on September 16, 2026, saying that continued rises in oil prices and refined products increased the risk of the energy shock feeding through into business costs, wages and prices. The bank forecast inflation would reach about 3.75% in the fourth quarter of 2026, then rise to slightly above 4% in the first quarter of 2027.
