Diesel still costing close to a ’dismal’ £2 a litre despite oil price falls

Diesel prices in the UK are stubbornly hovering near the record high of £2 per litre, even as oil prices have fallen significantly. According to the AA, a litre costs an average of 197p, which is considered "dismal" by the organization. In contrast, petrol has dropped by 6p, now costing 168p per litre, down from a peak of 174.7p at the beginning of October.

Christopher Waller, a US Federal Reserve governor, warned during a London conference that energy prices could remain "elevated" due to rising tanker traffic through the Hormuz Strait, which increases costs related to ship insurance and oil transfer to prevent Iranian attacks. The limited refining capacity and other constraints are also contributing to the high diesel prices in the United States, which Waller said are not likely to decrease as quickly as crude oil prices following a more stable Middle East.

The AA suggested that another 10p reduction in petrol prices is possible due to falling wholesale costs, which have dropped from 77p to 68p per litre and now sit below 62p. While pumping a full tank of petrol can save £2.75, the average diesel price has only decreased by 2p from the record high. Some areas, like London and the south-east, still have forecourts charging close to the early October peak prices, despite the significant drop in wholesale costs since mid-October.