Petrol at 159p Hits Fleet Operators Where It Hurts

What the numbers look like for fleet operators

The average price of a litre of petrol now stands at 159.43p, according to the RAC. That figure is 26.6p higher than on 28 February, the day the US and Israel first launched strikes on Iran.

Diesel, the fuel that matters most to commercial operators, sits at 184.96p per litre. That is 6.58p below its mid-April peak of roughly 191.5p, according to RAC data, but still historically elevated. A standard 55-litre diesel fill now costs £101.73, more than £23 above the pre-conflict level.

For a sole trader running a single van covering 25,000 miles a year at 35 miles per gallon, the annualised increase since February amounts to roughly £2,400 in additional fuel spend alone. Scale that to a five-vehicle fleet and the figure approaches £12,000, money that comes straight off the bottom line.

The RAC has previously warned that diesel's premium over petrol had become the widest in decades, as first reported by City AM. That gap disproportionately hits van-dependent tradespeople and last-mile delivery operators, a segment dominated by SMEs.

Fuel duty extension: how much does it actually help?

Chancellor Rachel Reeves confirmed last week that the government would extend the 5p-per-litre fuel duty cut, as part of a broader cost-of-living package linked to the Iran conflict. The measure keeps duty at 52.95p per litre rather than reverting to the scheduled 57.95p.

On a 55-litre diesel fill, the saving amounts to £2.75 per tank. For the hypothetical five-van fleet above, that translates to annual relief of roughly £2,000, offsetting only a fraction of the £12,000 increase in fuel costs since the conflict began.

The government has signalled no further fiscal headroom for additional transport subsidies. That leaves operators absorbing the remainder through margin compression, price increases to customers, or operational changes.

A senior cabinet figure warned, according to City AM reporting, that the economic drag from the conflict could persist for eight months after hostilities end. If accurate, businesses face a prolonged period of elevated input costs even in a best-case ceasefire scenario.

Ceasefire uncertainty and the oil price outlook

Oil prices had eased in recent days on signals that a ceasefire between the US and Iran could be nearing. That optimism proved short-lived.

President Trump stated on Monday that he would accept only a "great deal or no deal," as reported by City AM. Fresh US strikes on Iranian missile sites and boats followed. Iran's supreme leader Mojtaba Khamenei responded by warning the US it would no longer benefit from a safe haven provided by Gulf powers in the region, according to the same report.

"Investors remain focused on whether energy markets stabilise or whether higher oil prices start feeding back into inflation expectations and bond yields again," said Neil Wilson, investor strategist at Saxo Markets UK.

Rich McDonald, analyst at IG, described the day as "messy" for markets. He noted that enriched uranium, sanctions, regional security and the full normalisation of Strait of Hormuz flows all remain unresolved, according to comments reported by City AM.

For fleet operators, the practical takeaway is that forward visibility on fuel costs remains poor. Planning around a single price assumption carries significant risk in either direction.

Practical steps for managing fuel-cost exposure

None of the options available to SME fleet operators are cost-free, but several can limit downside exposure.

Contract renegotiation

Businesses locked into fixed-price delivery or service contracts agreed before February face the starkest margin erosion. Where contracts permit, operators should review fuel-escalation clauses. Where they do not, the next renewal is an opportunity to introduce them. Index-linked surcharges, pegged to published RAC or Department for Energy weekly averages, are standard in haulage and increasingly accepted in trades and facilities management.

Route and load optimisation

At 184.96p per litre for diesel, even modest efficiency gains matter. Route-planning software, fuller loads per trip and reduced idling time can trim fuel consumption by 10 to 15 per cent, according to Energy Saving Trust estimates for commercial fleets.

Hedging and fuel cards

Larger fleets may find value in fixed-price fuel card arrangements that lock in rates for 30 to 90 days. These do not eliminate cost increases but reduce volatility, making cash-flow forecasting more reliable.

Pricing transparency with customers

Passing costs through is never comfortable, but silence is worse. Operators who communicate the scale of the increase, and link surcharges to a published index, tend to retain more customer goodwill than those who simply raise headline prices without explanation.

The fuel spike is not the only cost pressure facing UK SMEs, but it is one of the most immediately visible. With ceasefire prospects uncertain and fiscal support limited to the 5p duty cut, operators who act on the controllable variables now will be better placed whenever prices eventually ease.