Petrol Prices Hit 160p: What's Driving the Rise Now

Petrol prices have hit 160p a litre, the highest average of the year, and anyone who's filled up recently will have felt it in their wallet. If you're wondering why the pumps suddenly feel so much more painful than they did in early July, you're not imagining it. This is a genuine spike, not a blip, and it's worth understanding what's driving it before you decide whether to grumble, change your driving habits, or start eyeing up something more frugal on the drive.

According to RAC Fuel Watch, the average price of petrol has risen sharply since the summer low point. The average price of petrol has hit a new Iran War high of 160p-a-litre having increased more than 9p since falling to a low of 150.59p on 6 July. Diesel has followed the same direction, though from a much higher starting point earlier in the year.

What's happened to petrol prices this summer

The pattern so far this year has been anything but smooth. Prices spiked hard in spring, eased back through June, and have now climbed again through July and into August. This price increase means that fuelling a family-sized car with unleaded petrol is now £88, and a tank of diesel costs more than before the conflict started.

Diesel has actually had the rougher ride overall this year. It peaked in mid-April and remains someway below that high, even after its recent climb, while petrol's latest rise has taken it to a fresh high point for the year rather than merely back towards an old one.

Why petrol and diesel aren't moving in step

It's tempting to assume petrol and diesel prices move together because they come from the same crude oil. In practice, they don't. Refining margins for the two fuels can move in opposite directions depending on global demand for each, shipping routes, and how much of each fuel refineries are set up to produce at any given time. That's exactly what's happened here: diesel has partially cooled from its spring peak while petrol has pushed on to a new high.

Why are prices rising again

The root cause is geopolitical. The RAC is tracking how pump prices in the UK are being affected by the conflict in the Middle East that began on 28 February 2026. That conflict has repeatedly rattled oil markets, and every time tensions escalate, wholesale costs for both petrol and diesel tend to jump within days, long before anything changes at the pump itself.

On top of wholesale crude costs, a few other things shape what you actually pay at the forecourt:

• Refining margins, which can widen or narrow depending on global supply and demand for each fuel
• The strength of sterling against the dollar, since oil is priced in dollars
• Biofuel blending costs, which are baked into the price of both E10 petrol and B7 diesel
• Fuel duty and VAT, which make up a fixed chunk of every litre regardless of the wholesale price
• Individual retailers' buying terms and margins, which is why supermarket and branded forecourt prices can differ by several pence

Pump prices change from week to week and vary by region, retailer and even street to street, so treat any single figure as a snapshot rather than gospel. For the latest official weekly average, check the DESNZ weekly road fuel prices data, or use our fuel finder tool to see what's charged locally.

What the fuel duty freeze means for you

One thing keeping prices from climbing even further is the temporary cut to fuel duty. On 20 May 2026, the government announced that the 5 pence per litre cut will be extended from 1 September to 31 December 2026, meaning the discount that's been in place since the 2022 Spring Statement stays put for the rest of the year rather than starting to unwind as originally planned.

That relief won't last indefinitely, though. Fuel duty rates will then be increased on 1 January 2027 and 1 March 2027 to return them to Fuel Duty levels before March 2022. In other words, enjoy the freeze while it lasts, because the rate is scheduled to creep back up from the new year.

Fuel duty rates and timings are set by the Treasury and can change at future fiscal events, so always check the current position on GOV.UK fuel duty guidance before budgeting around it.

Practical ways to soften the blow at the pump

Shop around properly, not just at your usual station

Prices can vary by ten pence a litre or more between neighbouring towns, let alone regions. A five-minute detour to a supermarket forecourt instead of a motorway services station can easily save you a fiver on a full tank. Our fuel finder tool makes it quick to spot the cheapest options nearby before you set off, and our fuel price news page is worth a look if you want to understand what's driving the wider trend before deciding whether to fill up now or wait.

Drive a bit smarter

Smooth acceleration, keeping tyres at the right pressure, and taking unnecessary weight out of the boot all make a real difference to consumption. None of it is glamorous, but shaving even a couple of miles per gallon off your usual consumption adds up over a year of commuting.

Know what your current car is actually costing you

Before you decide whether to keep running your current petrol car or start looking at something more efficient, it helps to know exactly where you stand. Our reg lookup tool lets you check a car's MOT history and tax status in seconds, and gives you a free indicative valuation too, useful if you're weighing up whether to sell now while values hold up, or wait it out.

Should you switch to something more economical

High fuel prices always prompt the same question: is it worth changing cars? There's no single right answer. A smaller, more efficient petrol car or a well-maintained hybrid can bring real savings on fuel, but you need to weigh that against the cost of changing, depreciation on your current car, and how many miles you actually cover each year. If your annual mileage is modest, the sums often don't stack up as neatly as they look on paper.

If you do decide a change makes sense, it's worth reading up on what to check before buying, from service history to running costs, in our buying guides. And if you'd rather spread the cost of a newer, more efficient car rather than dip into savings, MotifyMe can introduce you to car finance options, subject to status and affordability, so you can see what's realistically available before you commit to anything.

The bottom line

Petrol at 160p a litre is a genuine milestone for the year, driven mainly by the ongoing conflict affecting global oil markets rather than anything specific to the UK. The fuel duty freeze is doing some of the heavy lifting to stop things getting worse, but that support is due to start unwinding from January. In the meantime, shopping around, driving efficiently, and knowing exactly what your current car is worth and costing you are the most useful things you can actually control.