Snap analysis: Iran crisis fuels petrol shock fears
Petrol car drivers could see their fuel bills increase by over £320 a year
By Colin Walker
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With experts predicting that instability in the Middle East could see the price of a barrel of oil jumping to anywhere between $100 and $120 a barrel, [2] new analysis from the Energy & Climate intelligence Unit has revealed how much more this could see petrol car drivers having to pay to fuel their vehicles.
By analysing the past relationship between the price of a barrel of oil and the price of a litre of petrol in the UK, [1] it has been found that oil trading at $100 a barrel could see the price of a litre of petrol jumping from 135p today [3] to 150p – this would cost drivers doing 8,000 miles a year almost £140 more to fill their cars. Were the price of a barrel of oil to jump to $120, the price of petrol could increase to around 170p a litre, increasing annual fuelling costs by over £320 a year.
Meanwhile, price caps on the cost of electricity in place until June this year will shield drivers of EVs from the shocks we are currently seeing in global energy markets. At present, EVs are already over £870 a year cheaper to charge than a petrol car is to fuel. Were the price of a barrel of oil to jump to $100, those savings could jump to over £1,000 a year. Were a barrel of oil to hit $120, they would jump to almost £1,200 a year.
Gas prices are set to push up electricity prices from July, as happened during the gas crisis that started in late 2021, but renewables will reduce the impact, with large wind farms cutting the wholesale power price by a third in 2025. [4] And, even with higher electricity prices, EVs remain cheaper to run than petrol cars, with fuelling costs of less than a third of those of a petrol car during some of the worst of the gas crisis in 2022. [5]
Reports of fuel shortages and 90-car queues are coming in, with one station near Glasgow reported as already charging 169.9p for a litre of petrol. [6]
Commenting, Colin Walker, Head of Transport at the ECIU, said:
“This isn’t the first time that wars and global shocks have left British drivers facing a jump in their fuel bills, and it won’t be the last. But with over 1.8m EVs now on the UK’s roads, there are an increasing number of drivers who are much more protected from these spikes in fuel prices.
“Accelerating the transition to EVs – increasingly powered by electrons generated by British wind and solar farms – will help the UK end its dependency on foreign oil and protect its drivers from volatile markets over which we have no control. Oil is traded internationally, so trying to squeeze more out of the North Sea has little impact on the price paid at the pump.
“The UK car industry is producing ever more electric cars - the electric Nissan Leaf is already rolling off the production lines in Sunderland, while production of JLR’s new electric models is expected to start in the West Midlands this year”.
Notes to editors:
1. The analysis examined historical relationships between international oil prices and UK petrol prices, on a monthly basis from Jan-1990 to Dec-2025, using: Europe Brent Spot Price FOB (US EIA, accessed Feb-2026) adjusted by the £/$ exchange rate (OFX, accessed Feb-2026), and Motor spirit: Premium unleaded / ULSP from QEP Table 4.1.1 (DESNZ, accessed Feb-2026). The period Apr-2022 to Dec-2025 was identified as the most relevant on the basis that: this recent data better reflects how prices react in the context of current global infrastructure, including during the large price spikes caused by the war in Ukraine; and the fuel duty rate was constant, A linear trend was calculated for monthly data in this period, and used to estimate petrol prices at different oil prices (and with the £/$ exchange rate from the end of Feb-2026). A second trendline was calculated with a month’s lag between oil prices and petrol prices, and this gave very similar results to the first trendline.
The annual fuel costs for a petrol car and the annual electricity costs for an EV were calculated by taking the top 10 selling petrol cars (‘pure’ petrols and mild hybrids) of 2025, and identifying their electric equivalents, and the top 10 selling EVs of 2025 and identifying their petrol equivalents. It was assumed that the vehicles were doing 8,000 miles a year and, in the case of the EVs, it was assumed that 80% of the vehicles’ charging was done at home on cheap night time charging tariffs, and 20% on rapid public chargers (in line with Zapmap’s John and Rosa charging profile). For the petrol cars, the costs were calculated using a figure of £1.35 a litre (the average cost of a litre of petrol on Thursday 5th March, according to the RAC’s Fuel Watch website), then a figure of £1.50 a litre (the estimated price if a barrel of oil hits $100) and then a figure of 170p a litre (the estimated price if a barrel of oil hits $120). The average figures across all 20 model comparisons were then calculated for each of these three scenarios.
2. Financial Times - https://www.ft.com/content/374aa904-e942-46e7-9640-fea285ad0940
3. RAC Fuel Watch (correct as of Thursday 5th March) - https://www.rac.co.uk/drive/advice/fuel-watch/
4. ECIU - Wind farms cut power prices by almost a third in 2025
5. ECIU - EVs already three and a half times cheaper to run
6. The Daily Mirror - https://www.mirror.co.uk/news/uk-news/petrol-prices-hit-1699p-litre-36812989
For more information or for interview requests:
George Smeeton, Head of Communications, ECIU, t: 020 8156 5305, m: 07894 571 153, email:george.smeeton@eciu.net