Conflict in the Gulf adding £50 million daily to drivers' fuel bills
More than £2 billion has now been paid at the pumps by drivers in so-called war premiums, the RAC Foundation estimates.
Since the conflict in the Persian Gulf started on 28 February 2026 drivers have paid an additional £2.021 billion for their petrol and diesel over and above what they might have expected to pay if forecourt prices had remained where they were before war broke out.
Calculations use average fuel consumption figures from 2025 and daily pump prices since the war began.
Three quarters (£1.511 billion) of this premium has been footed by those with diesel vehicles, reflecting the fact that more diesel than petrol is sold in the UK and that the average price of a litre of diesel is around 33p higher than that of petrol.
Of the £2.021 billion, £337 million has gone to the Exchequer in windfall VAT payments, though some of that amount will later be reclaimed by VAT-registered businesses.
The war premium total is currently rising by around £50 million per day.
This week the price of a barrel of Brent crude oil has surged again, briefly hitting $120 on uncertainty over how and when the conflict will be resolved.
Steve Gooding, director of the RAC Foundation, said:
“This is another unwelcome milestone for millions of motorists as the financial pain caused by the war in the Persian Gulf continues to mount up. As ministers themselves have warned the economic effects of the conflict could last for months even after it has ended, but as yet no end is in sight.
“The owners of diesel vehicles have borne the largest brunt of the pump price hikes, many of whom will be commercial users with little choice but to pass on their costs to their customers. Whether we are drivers or not we all end up feeling the pinch from sky-high forecourt fuel prices.
“The question for the Chancellor must be not just whether it is tenable to stick with her planned hike in fuel duty in four months’ time but whether the burgeoning costs battering household and business budgets alike are reaching the point where a more dramatic change of plan is warranted despite the hole that would make in the Treasury’s already squeezed coffers.”
According to government data there were 4.6 million vans and 10.3 million cars powered by diesel on the road in the UK as of the end of quarter 3 2025. There were also 18.9 million petrol cars.
ENDS
Contacts:
Philip Gomm – Head of External Communications – RAC Foundation
[email protected] | 07711 776448
Notes to editors:
The RAC Foundation is a transport policy and research organisation which explores the economic, mobility, safety and environmental issues relating to roads and their users.
It is a registered charity. Charity number: 1002705.
The Foundation publishes independent and authoritative research with which it promotes informed debate and advocates policy in the interest of the responsible motorist. For more information visit www.racfoundation.org