Diesel prices surging to nearly £2 a litre as global refining shortages hit UK drivers and small businesses

# What is happening Diesel prices in the UK are climbing rapidly as a global refining shortfall limits the supply of the fuel that powers vans, trucks, farm machinery and many commercial tools. Damage to refineries in Russia and the Middle East, plus shipping disruption through the Strait of Hormuz, have removed a significant share of the world's diesel supply. That push on supply is showing up at UK forecourts, where diesel has risen by about 38% since late February and some stations are charging around or above £2 a litre.

# Why refining, not crude, matters now Brent crude prices have fluctuated, but the more acute problem is a shrinking refining capacity. Several factors contribute:

• Strait of Hormuz, constraining what the region can deliver.
• China has capped exports of refined products to protect domestic supply, reducing the pool of internationally traded diesel.

When refineries cannot turn crude into diesel and other products, fuel shortages appear at the pump even if crude is available.

# Who is being hit hardest

• Tradespeople who use vans to carry tools and materials face higher running costs and may need to raise prices for customers.
• Farmers and haulage firms confront heavier fuel bills that feed through into food and goods prices.
• Consumers will feel the squeeze indirectly as businesses pass on higher transport and distribution costs.

# Price direction and immediate outlook Average UK diesel prices climbed sharply after the Middle East crisis escalated in late February. Pump averages have been reported in the high 190p-per-litre range and have reached record highs in Europe and the US. Market indicators and analysts expect UK forecourt prices to reach or exceed £2 per litre at some sites in the near term. Global uncertainty—further refinery damage, export caps, or shipping disruptions—could push prices higher.

# What this means for budgets and businesses Household fuel costs rise directly for diesel vehicle owners, and indirectly for others through higher prices on goods and services. For small firms the effect is immediate: increased diesel costs raise operational costs for every job that requires travel or diesel-powered equipment. Many independent operators are already raising their prices, which could reduce demand for discretionary services in low-income areas.

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