Will this year see an increase in gas prices?

In the UK, gas prices have been comparatively low so far in 2025; in May, they reached a four-year low

Will the price of gasoline increase, however, given that the Middle East conflict is making the price of oil more volatile?

Up until now, drivers filling up at the pump have had very little to be afraid of in 2025.

Despite a slight increase in the price of gasoline at the beginning of the year, fuel prices have been steadily declining in the first half of 2025, hitting a four-month low in May.

The RAC reports that the average price of a litre of unleaded gasoline was 133.59p in June, indicating a slight increase in petrol prices since then.

In other words, filling up a 55-liter gasoline tank costs slightly more than 73, whereas filling up a diesel tank of the same capacity costs about 77.

However, after Israel bombed Iran's nuclear facilities on June 13 and the United States carried out a similar strike on June 22, which caused a sharp increase in the price of oil, a further decline in gasoline prices may be in jeopardy.

Crude oil is enriched to make gasoline and diesel, so when oil prices rise at the wholesale level, so does the price at the pump.

Furthermore, drivers in the UK may be negatively impacted by changes in the exchange rate because oil prices are set globally and, regrettably for British citizens, are expressed in dollars.

We examine the outlook for gasoline prices in 2025 in light of the current oil market's instability and the growing tensions in the Middle East.

How come oil prices fluctuate?

When Israel launched a missile strike against Iran on June 13th, targeting its nuclear facilities, the price of oil skyrocketed.

Israeli officials claim the strike was required to stop Iran's nuclear program because they were concerned the country was on the verge of creating a nuclear weapon.

Before the Israeli strike, the price of a barrel of Brent crude oil was about £70, but it skyrocketed to about £7677 after the strike. The price of oil was very volatile during the next week, but it remained far higher than it was prior to the conflict.

Following US President Donald Trump's order to bomb three of Iran's nuclear facilities on June 21, which raised concerns about whether Iran would retaliate and whether the US would stay involved in the conflict, there was even more market turbulence.

After the American strike, the price of a barrel of Brent crude oil shot up from about £77 to just over £79 when markets reopened on June 23. This was a huge increase from the £69 price before the strikes.

Before Iran and Israel signed a ceasefire agreement in the early hours of June 24 (UK time), Iran then launched a retaliatory strike against a US military base in Qatar.

However, Israel claimed that Iran violated the terms of the ceasefire and continued firing rockets at Iran just hours after it was reached.

Following Iran's attack on the US military base in Qatar, oil prices fell sharply and continued to do so even after the ceasefire was broken.

As of this writing, a barrel of Brent crude oil is currently trading for about £69, which is about the same price as it was right before the conflict started.

What impact does oil market volatility have on gas prices?

Since petrol is an oil derivative, as was previously mentioned, changes in the price of oil will inevitably affect the price of petrol.

This was evident in 2022, when oil prices skyrocketed following Russia's invasion of Ukraine and European nations, including the UK, cut off Russia's access to oil supplies. The price of gasoline increased to 191p per litre in July 2022.

Concerns about a comparable increase in gas prices will intensify if the Iran-Israel conflict persists because price increases will result from restrictions on the oil supply.

"There are concerns that the Middle East conflict may result in yet another cost-of-living pressure for consumers by driving up the price of gasoline at the pump," stated Victoria Scholar, head of investment at Interactive Investor.

Although gas prices were declining prior to this month, the scholar warns that "drivers filling up at the forecourt could be set for steeper petrol and diesel bills if oil prices continue to rise."

As evidenced by the declining price of oil since the evening of June 23, the markets appear to be hopeful that deescalation will continue for the time being.

Where is the cheapest place to buy fuel?

Supermarkets are frequently the most economical locations to fill up because they take advantage of economies of scale when purchasing in large quantities and are particularly motivated to provide a good deal in order to draw customers to their establishments.

Supermarkets frequently provide the best prices on gasoline and diesel because of this and the rewards programs that many offer (such as Nectar and Clubcard).

Tesco is currently the greatest supermarket for filling up your car, with petrol prices of about 129p per litre.

Citation: RAC Fuel Watch, June 24.

The best course of action when attempting to minimize fuel expenses is to avoid motorway service stations and their pumps.

This is because service stations can charge their captive audience more because they can take advantage of them.

RAC uses the average price of unleaded in the UK, which is 133p59p, as an example. However, the average service station's price is 158p12p.