Following the announcement of a conditional two-week ceasefire in the Middle East, oil prices have begun to drop. But if you’re expecting cheaper petrol and diesel at the pumps immediately, you may be disappointed.
Here’s why fuel prices rise quickly but fall slowly – and what drivers can realistically expect in the coming weeks.
Where Prices Stand Now
According to the RAC, average UK fuel prices currently stand at:
- Petrol: 157.71p per litre – up 25p (19%) since the conflict began on February 28
- Diesel: 190.62p per litre – up 48p (34%) since February 28
Both fuels are now at their most expensive since late 2022. Filling a 50-litre tank now costs £78.86 for petrol and a staggering £95.31 for diesel.
Why Prices Won’t Fall Immediately
RAC head of policy Simon Williams explained: “The conditional ceasefire announcement may have taken some heat out of global oil prices, but the outlook for drivers in the UK remains highly uncertain.”
He added: “Drivers should not expect significantly cheaper fuel in the short term.”
There are several reasons why pump prices lag behind falling oil costs:
1. Retailers Bought Fuel at Higher Prices
Petrol stations don’t buy fuel in real-time. They purchase stock days or weeks in advance at whatever the wholesale price was at that time. When oil prices spike, they’re selling fuel they bought cheaply – but when prices fall, they’re still selling fuel they bought at peak prices.
Until that expensive stock is sold through and replaced with cheaper fuel, pump prices remain high.
2. Wholesale Prices Need to Fall Sustainably
A brief dip in oil prices isn’t enough. Williams noted: “It is a sustained lower oil price – over several weeks, not just a few days – that is required to bring wholesale fuel costs down meaningfully.”
Retailers and suppliers need confidence that lower prices will hold before they adjust their purchasing and pricing strategies. A ceasefire that could collapse at any moment doesn’t provide that certainty.
3. The Supply Chain Has Multiple Steps
The journey from crude oil to your fuel tank involves multiple stages:
- Crude oil extraction
- Shipping to refineries
- Refining into petrol and diesel
- Distribution to fuel terminals
- Delivery to individual forecourts
Each step involves contracts, logistics, and lead times. A drop in crude oil prices today won’t reach the pumps for days or weeks as it works through the system.
4. The Strait of Hormuz Factor
Even with a ceasefire, the practical challenges remain. Williams highlighted: “Much will depend on the stability of the ceasefire, whether oil shipments can move freely through the Strait of Hormuz, and the longer-term impact on oil production across the Gulf.”
Until shipping routes are fully restored and operating normally, supply constraints will continue to support higher prices.
5. “Rocket and Feather” Pricing
There’s a well-documented phenomenon in fuel retail known as “rocket and feather” pricing – prices rocket up quickly when costs rise, but float down like a feather when costs fall.
The Competition and Markets Authority has been investigating whether UK fuel retailers engage in this practice. Critics argue that some retailers are slower to pass on savings than they should be, boosting their margins during the transition period.
What Can Drivers Expect?
Williams offered a cautious outlook: “The best hope in the short term is that pump prices stop rising at the rate they have been and hopefully top out in the coming days.”
In practical terms:
- Immediate term (days): Prices may stabilise or slow their rate of increase
- Short term (1-2 weeks): If the ceasefire holds and oil remains lower, prices may begin to edge down
- Medium term (weeks to months): Sustained lower oil prices could see meaningful reductions at the pump
However, any escalation in the conflict could reverse progress immediately.
Which Stations Might Cut Prices First?
Williams noted: “Some smaller independent forecourts buying on a ‘spot’ basis may be quicker to pass on any reductions.”
Large supermarket chains and branded forecourts typically buy fuel on longer-term contracts, meaning their prices are slower to adjust. Smaller independents who purchase fuel more frequently at current market rates may reflect price drops sooner.
This means shopping around becomes even more important during transitional periods. Price differences between stations can widen significantly as some cut prices while others lag behind.
How to Find the Best Prices Now
With prices at record highs and likely to remain elevated for some time, finding the cheapest fuel near you is essential:
Check prices before every fill-up – Use CheckFuelPrices to compare stations in your area. Price differences of 20p+ per litre are common.
Look beyond the big names – Independent forecourts may pass on savings faster than supermarkets and major brands.
Monitor prices over time – As costs potentially stabilise, early movers will cut prices first. Regular checking helps you spot the deals.
Consider timing – If prices are falling, waiting a few days to fill up could save money. If prices are rising, fill up sooner rather than later.
The Bottom Line
Fuel prices rise like a rocket and fall like a feather. Even with oil prices dropping following the ceasefire announcement, drivers shouldn’t expect immediate relief at the pumps.
The key factors to watch:
- Whether the ceasefire holds
- How quickly shipping through the Strait of Hormuz normalises
- Whether oil prices remain sustainably lower for several weeks
- How quickly retailers pass on wholesale savings
In the meantime, keep shopping around. Use CheckFuelPrices to find the cheapest fuel near you – because even as average prices remain high, the best-priced stations could save you £10-15 per tank.
We’ll continue tracking prices daily and report as soon as meaningful reductions appear at the pumps.