UK and New Zealand Brace for Fuel Price Spikes

Fuel prices in New Zealand and the United Kingdom are rising due to escalating tensions in the U.S.-Iran conflict, including a tanker strike off Saudi Arabia and threats by Donald Trump to bomb Iranian infrastructure, alongside Ukrainian drone attacks on Russian refineries. In New Zealand, Simon Parham, chief executive of Waitomo Group, expects petrol prices to climb toward $3 per litre and diesel toward $2.50 over the next two weeks. Parham notes that a global crude oil rebalancing from Brazil, Guyana, and the U.S., combined with relaxed export rules from China, will likely prevent prices from hitting previous peaks seen in early 2026.

In the United Kingdom, Prime Minister Andy Burnham has inherited a fuel duty freeze established by former Prime Minister Keir Starmer. The government extended a 5p fuel duty cut through the end of the year, which is projected to save the average driver £120 since 2025. Chancellor Rachel Reeves implemented these measures to protect households and businesses from price volatility.

Despite these interventions, the Liberal Democrats are calling for more aggressive emergency measures. Transport spokesperson Bobby Dean has urged the government to implement an additional 10p fuel duty cut per litre and a £1 cap on national bus fares. Current data indicates petrol costs have risen to 20p per mile from 17p in January, with the RAC Foundation estimating that conflict-driven hikes have cost motorists billions.