Diesel drivers to pay price of Iran worry

Diesel car and van drivers, prepare for another price hike. Market supply wobbles is pushing the price up of diesel again, which could peak at 143p a litre by the end of the month.

It's not just a worry for diesel drivers. More expensive derv means more expensive groceries and merchandise - higher inflation - given the cost of predominantly diesel-powered freight in the UK.

Persian tension

The Retail Motor Industry Federation (RMI) says escalating tension between Iran and the western world over Iran's nuclear intentions has seen the EU try to force an embargo on crude oil supplies. Iran has responding by threatening to blockade the Straits of Hormuz through which 30 to 40% of the world's oil supply is shipped.

This explains the steep derv spike. "This is a very worrying development but not entirely unexpected," says RMI chairman Brian Madderson. "I wrote to the Chancellor on 2 January highlighting the serious supply issues ahead and enclosing a report 'The case for reform of fuel taxation' as it is the Government's only direct control over rocketing fuel prices which are undermining society and our economic recovery."

Diesel vs petrol?

Last year UK sales of diesel cars outstripped petrol ones for the first time (the VW Golf was the UK's biggest derv seller). Diesel cars traditionally have found favour with company car fleet drivers, especially as their performance - particularly mid-range torque - and refinement have substantially improved in the last 5-10 years.

But the increasing power, economy and emissions standards of petrol cars is now playing catch-up with diesel models. Whether diesel cars can maintain their lead is now in question, especially given the current pricing gap of fuel (not to mention higher initial purchase cost) and the pressure to downsize to smaller, 'greener' vehicles.

If you drive a diesel car, let us know why. Is it simply about better outright economy, despite the growing gap between petrol and diesel prices? If you struggling to make up your own mind about the running costs of petrol or diesel cars, take a look at the Consumers' Association driver comparison tool here.
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