What drives diesel prices at the pump?

Evidence-backed: Diesel is a refined petroleum product: a fractional distillate of fuel oil, and a high-volume product of oil refineries. That means its price starts with crude oil, then adds the cost of refining it into diesel, then moving and selling it, then taxes. Because diesel competes with other refinery outputs for the same barrel of crude, the refining step matters: when refiners can sell other products profitably, diesel supply and price shift too. Standards also shape supply — in the EU diesel must meet EN 590, and almost all petroleum diesel sold in the UK, mainland Europe and North America is ultra-low-sulfur diesel, which requires extra processing.3

Evidence-backed: The crude-oil component is the most visible and the most volatile. When global oil prices move, pump prices follow: the RAC linked the rise in UK petrol and diesel pump prices directly to rising global oil prices, and UK diesel passed £2 a litre for the first time.2

Evidence-backed: The 2026 Iran war fuel crisis is described as a worldwide fuel crisis caused by the war between Iran and the U.S.-Israel coalition. The closure of the Strait of Hormuz — through which over 20% of the world's oil trade passes — and attacks on energy infrastructure in Iran and several Gulf Cooperation Council countries caused a large disruption to global oil supplies. Countries that imported most of their fuel from the Persian Gulf were hit by shortages, and much of the world saw panic buying and severe disruption to the distribution of petroleum products, LNG and urea used for fertiliser. Economies were expected to be adversely affected, with inflation and heightened risks of stagflation and recession.1

Evidence-backed: The crude price path reported for 2026: Brent surged to a peak of approximately $118 in late March, declined to around $70 by 1 July, rebounded to over $100 by late July, and fluctuated between $87 and $97 through August. As of April 2026 there were ongoing concerns about energy security and food security, the latter tied to fertiliser shortages and costs.1

Evidence-backed: Governments responded with emergency supply measures. The G7 agreed a co-ordinated release of millions of barrels of oil and diesel, aimed at heading off further price spikes and avoiding a ban on US diesel exports.4

Evidence-backed: Diesel is a high-volume refinery product and needs good compression-ignition characteristics, so it is not simply interchangeable with petrol. It is also standardised in many countries (EN 590 in the EU) and mostly sold as ultra-low-sulfur diesel in the UK, mainland Europe and North America, which adds processing. Alternatives such as biodiesel, biomass-to-liquid and gas-to-liquid diesel exist and are increasingly developed, but the dominant product remains a petroleum distillate. Together these features mean diesel supply depends on refinery configuration and on how much crude is being processed, not just on the crude price alone.3