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Petrol and diesel prices to fall in two weeks if Iran ceasefire holds, AA says
Hard-pressed motorists could be in for some good news if the Iran ceasefire holds. Motoring groups say the cost of petrol and diesel should fall in about two weeks if peace talks at least continue as planned over the weekend in Islamabad.
An AA spokesperson said: “Based on the fuel industry’s rule of thumb of a 10 to 14-day lag between wholesale cost movements and those at the pump, drivers should expect prices on forecourts to level by next weekend and then fall – providing the ceasefire holds.”
An average tank of petrol is now £13.86 more expensive than it was at the beginning of the war, when it stood at £86.92, the RAC said. A full tank of diesel now costs £26.80 more at £105.11.
The average price of a litre of petrol was 158p on Thursday, while diesel was 191p. That’s up from 133p and 142p as the end of February, just before the US and Israel launched strikes on Iran.
A fall in petrol prices would be a result for those on the lowest incomes, who see the cost of food and fuel eating up larger portions of their pay.
Oil prices are up 35 per cent since 28 February, when the war began. As a result, most countries have seen petrol prices rise, according to the Global Petrol Prices index, with the UK ranking as 72nd on the list.
Cambodia, Vietnam and Nigeria are the three worst-hit nations on petrol costs. Some countries in southeast Asia have implemented fuel-saving measures, such as working from home, four-day weeks and car sharing.
Oil prices fell after the ceasefire was announced and stock markets surged as optimism grew that the conflict could end soon and oil tankers would be able to once again move freely through the Strait of Hormuz. But they rose again on Thursday as some investors bet it wouldn’t hold.
Brent Crude, which serves as the main benchmark for oil prices worldwide, was up 4.6 per cent at $99.11 a barrel on Thursday, following fresh attacks on Lebanon by Israel. But they were still below the $100 level.
US vice-president JD Vance did not help sentiment by referring to it as a “fragile truce” and Donald Trump warned that “bigger, better, and stronger” attacks on Iran would follow if it was breached.
While petrol prices should come down if peace holds, the oil market will take much longer to recover, experts say, even if the key Strait of Hormuz is properly reopened.
Helima Croft, head of global commodity strategy at RBC Capital Markets, said: “Above all, we think the mechanics of reopening the strait will be exceedingly messy, with Iran potentially having a vote on nearly every barrel that exits the waterway until Gulf countries can build more alternative access routes.”
ChatGPT developer OpenAI has halted plans for a significant UK data centre project, citing high energy costs and regulatory challenges as barriers to investment.
The US technology giant had intended to establish its “Stargate” data centre initiative within a new artificial intelligence growth zone in the north-east of England.
The venture was slated for multiple sites, including Cobalt Park near Newcastle and Blyth.
However, OpenAI said the plans are now on hold, awaiting “the right conditions” to facilitate long-term infrastructure investment across the UK.
A spokesman for OpenAI said: “We see huge potential for the UK’s AI future. London is home to our largest international research hub, and we support the Government’s ambition to be an AI leader.
“AI compute is foundational to that goal – we continue to explore Stargate UK and will move forward when the right conditions such as regulation and the cost of energy enable long-term infrastructure investment.”
The reference to energy costs come at a time when prices are being pushed higher by the US and Israel’s war with Iran.
The International Monetary Fund (IMF) said in March that the UK was one of the nations particularly exposed to soaring wholesale costs because of its reliance on gas-fired power, as opposed to sources such as nuclear and renewable energy.
Data centres are powered by very large amounts of energy so are more likely to be exposed to volatile prices.
OpenAI added: “In the meantime, we are investing in talent and expanding our local presence, while also delivering on the commitments under our MOU (memorandum of understanding) with the Government to adopt frontier AI in UK public services.”
Its Stargate project aims to invest billions of dollars into AI infrastructure in the US, with funding from OpenAI, SoftBank, Oracle and MGX and partnering with tech giants including Nvidia and Microsoft.
Building it into the UK came as part of a landmark tech deal between Britain and the US, announced last September amid President Donald Trump’s second state visit.
The deal also included a 30 billion US dollar (£22.3 billion) pledge from Microsoft, the largest ever made by the company in the UK, to fund the expansion of Britain’s AI infrastructure.
Conservative MP and shadow science minister Ben Spencer said: “When global firms cite high energy costs and regulatory uncertainty as reasons to walk away, it tells you everything about the direction of travel.
“For too long, Labour have prioritised courting big tech headlines while neglecting our domestic start-ups, but also the fundamentals that actually attract investment at home.”
Importers are in line for tariff refunds. But whether everyone who paid the for the tariffs will get money back is a trickier question.
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Somerset councillor Heather Shearer said: “One thing the Crisis Resilience Fund wants us to do is not just support people in crisis, it also wants us to work in our community, give more strength and support for the organisations who already support our families.”
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