With petrol at 140.3p and diesel at 148.2p per litre, UK drivers are paying more than a year ago. So where are prices heading? Here's an analysis of the key factors that will determine UK fuel costs through 2026.
Three factors determine what you pay at the pump: crude oil price (set globally), the GBP/USD exchange rate (since oil is priced in dollars), and UK fuel duty and VAT (fixed by government). Of these, crude oil is the most volatile and hardest to predict.
Brent crude is currently trading around $85 per barrel. Several competing forces are at play:
The consensus among analysts is that oil prices will remain range-bound between $75-95 per barrel through 2026, barring a major geopolitical shock. At current exchange rates, this translates to UK petrol remaining broadly in the 140-160p/litre range for most of the year.
Fuel duty has been frozen at 52.95p per litre since 2011, with a temporary 5p cut from March 2022 still in place. Any reversal would add approximately £2.50 to a 50-litre fill. Most analysts expect the freeze to continue through 2026.
| Scenario | Petrol forecast | Likelihood |
|---|---|---|
| Base case (oil $75-95, stable £) | 140-160p | Most likely |
| Upside (Middle East shock) | 170-185p | Possible |
| Downside (recession, demand drop) | 120-135p | Less likely |
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