Chancellor John Healey has revealed that the UK government is actively engaged in discussions with US officials following President Donald Trump’s warning that he is seriously considering a ban on diesel exports. Speaking from the Labour Party Conference in Liverpool, Healey emphasized that the UK is also proactively preparing contingency measures and utilizing domestic fuel reserves to mitigate potential supply shocks.
The pressure on fuel markets has intensified due to the ongoing US-Israel conflict with Iran and Russia’s war in Ukraine. These geopolitical tensions have severely disrupted the production and transport of wholesale oil over the last seven months, contributing to a global surge in fuel costs. Currently, the UK sources approximately one-third of its diesel imports from the United States, making any sudden restriction a significant economic risk.
Domestic pump prices have hit record levels, with the RAC reporting that the average cost of diesel reached 199.33p per litre on Monday. This figure surpasses the previous record of 199.09p set in June 2022 following the invasion of Ukraine. Meanwhile, petrol prices have also climbed, reaching 174.23p per litre. The RAC described current diesel costs as entering uncharted territory, highlighting the UK’s vulnerability to distant global events. According to the RAC, Diesel prices had entered “uncharted territory” and served as a reminder of “just how exposed the UK is to events occurring far away”.
US sources indicate that President Trump may be weighing this export restriction as a strategy to lower domestic fuel costs ahead of crucial midterm elections. In response to these developments, Chancellor Healey stressed that the ultimate resolution requires diplomatic progress and an end to hostilities in the Middle East to alleviate the extreme cost-of-living burden on British households and businesses. Has contacted the White House for comment.
As the administration prepares for its October 28 budget, Chancellor Healey is navigating the expiration of a fuel duty freeze originally implemented in 2022. Under current policy, this freeze is set to end at the conclusion of the year, with scheduled price increases of 3p per litre in January and an additional 2p in March.
Healey reiterated that the government is working closely with American counterparts to reach an understanding that could solve or at least mitigate the crisis. While acknowledging that diesel prices are currently at an extreme level, the Chancellor maintained that the priority remains a diplomatic settlement to restore stability to global energy markets. In the end, we’re also working with the Americans where we can try and put in place what will solve this, or at least significantly ease it, which would be a diplomatic settlement [and] an end to the fighting with Iran.
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