The UK government is engaged in discussions with US authorities to prevent a potential ban on diesel exports, Chancellor John Healey revealed in an interview with BBC News. The talks come amid rising diesel prices in the UK, which reached a new high on Monday due to supply pressures stemming from global conflicts. Healey stated that the UK is preparing for a possible ban and has its own diesel stocks.
Diesel prices in the UK have surged to unprecedented levels, with the average price per litre reaching 199.33p on Monday, according to the RAC motoring organisation. This surpasses the previous high of 199.09p recorded in June 2022, following Russia's invasion of Ukraine. The price hike is attributed to the ongoing conflict between the US, Israel, Iran, and Russia's war with Ukraine, which has severely disrupted wholesale oil production and transportation.
The UK relies heavily on the US for diesel imports, with approximately a third of its supplies coming from the country. A ban on diesel exports by the US would significantly exacerbate the price pressures, Healey warned. US President Donald Trump has threatened to impose a ban on diesel exports, citing the need to bring down prices for domestic consumers ahead of the midterm elections.
Healey emphasised the need for a diplomatic settlement to ease the pressure on fuel prices. He stated that the UK is working closely with the US to find a solution, adding that an end to the conflicts in the Middle East would help alleviate the cost of living pressures faced by households and businesses.
The RAC warned that diesel prices have entered "uncharted territory," highlighting the UK's vulnerability to global events. The organisation's comments serve as a reminder of the impact of international conflicts on the UK's fuel prices. Petrol prices are also rising, with a litre currently costing 174.23p.
Healey is set to unveil a "breathing space" Budget on 28 October, which is expected to address the cost of living pressures faced by households. A freeze on fuel duty, implemented by the Conservative government in 2022, is due to expire at the end of the year, with duty scheduled to increase by 3p in January and a further 2p in March.
Healey stressed that a settlement in the Middle East is crucial to easing the pressure on fuel prices. He expressed awareness of the cost of living pressures faced by households and businesses, adding that the government is working to find a solution to the crisis. The BBC has contacted the White House for comment on the potential diesel export ban.
Key points
- UK Chancellor John Healey is in talks with US authorities to prevent a potential ban on diesel exports.
- Diesel prices in the UK have reached a new high due to supply pressures stemming from global conflicts.
- A ban on diesel exports by the US would significantly exacerbate price pressures in the UK.
