Cost of Iran oil crisis to UK drivers hits milestone of GBP2 billion

(Alliance News) - The Iran oil crisis has cost UK drivers GBP2 billion through higher fuel prices in just over a month, according to new analysis.

Motoring research charity the RAC Foundation estimated that rises in pump prices since the conflict in the Middle East began on February 28 have led to motorists paying an additional half a billion pounds for petrol and GBP1.5 billion for diesel.

The analysis also shows the additional VAT received by the Treasury because fuel is more expensive exceeds GBP336 million.

The figures are based on average daily pump price rises and last year's fuel consumption rate.

VAT on road fuel is charged at 20% on top of the combined price of the product and fuel duty, with the latter standing at nearly 53 pence per litre.

Steve Gooding, director of the RAC Foundation, said: "This is another unwelcome milestone for millions of motorists as the financial pain caused by the war in the Persian Gulf continues to mount up.As ministers themselves have warned, the economic effects of the conflict could last for months even after it has ended.

"The owners of diesel vehicles have borne the largest brunt of the pump price hikes, many of whom will be commercial users with little choice but to pass on their costs to their customers.

"Whether we are drivers or not, we all end up feeling the pinch from sky-high forecourt fuel prices."

Oil prices – which have a significant effect on the cost of wholesale fuel – soared in response to Iran's stranglehold on tankers passing through the Strait of Hormuz.

The average price of a litre of petrol and diesel at UK forecourts remains 24p and 47p respectively higher than before the war began, despite a slight drop in recent days.

By Neil Lancefield, Press Association Transport Correspondent

Press Association: News

source: PA

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