The United Kingdom is currently in negotiations with US officials regarding a potential halt to diesel exports, Chancellor John Healey has confirmed. As the UK prepares for the possibility of a ban, the government is also reviewing its domestic fuel reserves to mitigate the impact of supply pressures currently affecting the global market.
Diesel prices in the UK reached a record high of 199.33p per litre on Monday, according to the RAC, surpassing the previous record of 199.09p set in June 2022. Petrol prices have also seen increases, currently standing at 174.23p per litre. The RAC stated that these prices have entered "uncharted territory," serving as a stark reminder of the UK's exposure to international events.
The current supply crisis is largely attributed to the conflict between Russia and Ukraine, alongside the ongoing war involving Iran, which has significantly disrupted the production and transportation of wholesale oil. US President Donald Trump has indicated that he is seriously considering a ban on diesel exports, a move reportedly intended to lower domestic prices for American consumers ahead of the upcoming midterm elections. The UK currently relies on the US for approximately one-third of its diesel imports, meaning any export restrictions would likely drive prices even higher.
Speaking at the Labour Party Conference in Liverpool, Chancellor John Healey noted that the government is working closely with American counterparts to find a solution. He suggested that a diplomatic settlement to the fighting with Iran would be the most effective way to ease the current pressure. Healey acknowledged the extreme nature of current fuel costs and stated that the government is preparing a "breathing space" Budget, scheduled for 28 October.
The government faces a looming deadline regarding fuel duty, as a freeze implemented by the previous Conservative administration is set to expire at the end of the year. Current plans indicate that duty is scheduled to rise by 3p in January and a further 2p in March. Emphasizing the need for relief, Healey stated, "Fundamentally, what we need is a settlement in the Middle East. We need an easing of the pressure of costs on business, the costs on households and on ordinary families that we see at the pumps in the most extreme level today for diesel." The White House has been contacted for comment regarding the potential export ban.
Healey, who admitted that UK diesel prices are "extreme", said the government was in discussions with the US, adding: "We're also making the provision that we may need to and we have our own stocks in the UK."
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