PETROL prices could hit an average of £2 a litre in the UK by May if the Iran war continues to escalate, experts warn.
Fuel prices continue to rocket up in the UK, with petrol up to 148.78p a litre on average, according to the latest data released today. This is the highest level since May 2024 and has risen over 12% since the start of the war a month ago.
Drivers have even reported seeing over £2 a litre at some pumps.
Diesel is now 176.52p a litre on average in the UK – the highest level since December 2022.
In the US, average petrol prices have jumped a third from $3 a gallon to $4. Rising costs at the pump could put pressure on US President Donald Trump ahead of the mid-term elections in November.
The war in the Middle East shows no sign of abating with Trump issuing new threats to “obliterate” Iran’s power plants and oil wells if a deal is not reached “shortly”.
But Iran’s foreign ministry has denied there are any negotiations with the US to end the war.
Samuel Mather-Holgate, Managing Director & IFA at Swindon-based Mather and Murray Financial, said he expects to see £2 a litre in a matter of weeks, if the Iran war escalates.
He added: “The war in Iran continues to affect the UK consumer, as petrol prices keep going higher. Average prices will hit £2 a litre by May if there is further escalation in the region, which is a real possibility given the track record of Trump.
“Given that same consideration, if Donald Trump declares he’s won and pulls out of the region then the price of oil could retreat as well, meaning petrol prices could be back to normal by the summer.”
Average prices will hit £2 per litre by May
Tony Redondo, Founder at Newquay-based Cosmos Currency Exchange, said he does not expect the price to hit £2 on average across the whole of the UK.
He added: “The surge in UK petrol to 148.78p a litre and US prices to $4 a gallon represents a perfect storm of geopolitical instability and supply fears. While £2 a litre has been spotted at high-cost pumps, it is unlikely to become the national average soon. Historically, such levels trigger demand destruction where consumption drops, naturally capping prices.
“The UK’s 5p fuel duty cut, in place until September, remains a vital buffer against that psychological threshold. In the US, sharp price hikes are a political landmine for Donald Trump ahead of November’s midterms.
“While his instinct is to drill domestically, sustained high costs may force a pivot — if the economy stumbles, pressure from allies and voters could push him toward brokered de-escalation in the Middle East to stabilise global markets. For now, fuel remains a stealth tax on households, keeping inflation sticky and interest rates high as the world watches the Strait of Hormuz for the next move.”
Anita Wright, Chartered Financial Planner at Ribble Wealth Management, said the price increases are a “warning sign” of how fragile our systems are.
She added: “This is not a story about the world suddenly running out of oil. It is far closer to a supply and delivery shock layered on top of an already debased currency system. There is a crucial difference between there being no oil and there being oil that becomes more expensive to move, insure, refine and deliver because geopolitics has disrupted the chain.
“When that happens, pump prices jump quickly, not because the earth has run dry, but because the route from producer to motorist has become unstable. This is a warning sign of how fragile the pricing system becomes when energy meets monetary weakness.
“Price inflation is not some isolated accident, it is the visible consequence of currency debasement, which then gets intensified by real-world shocks such as energy disruption. Petrol is simply one of the fastest ways that monetary deterioration shows up in ordinary life, because households notice it immediately.”
A stealth tax on households
Colette Mason, Author & AI Consultant at London-based Clever Clogs AI, said she has seen the price rises at the pumps in person.
She added: “Petrol at £2 a litre isn’t a forecast anymore. It’s already on some forecourts, and the average is catching up fast. I paid £197p a litre for regular diesel on the last fill up.
“For businesses, this isn’t just a cost-of-filling-the-tank story. It runs straight through logistics, field services, delivery, and any operation where staff or goods move. Unlike the general population who take it on the chin, those costs don’t get absorbed quietly.
“They show up in supplier invoices, in van fleet budgets, in the mental arithmetic every sole trader does before accepting a job fifty miles away. The 7% real-terms increase in employment costs that industry commentators flagged earlier this year just got a travelling companion.”
Photo by Tahamie Farooqui on Unsplash.
