The UK is in talks with US authorities over a potential stoppage of diesel exports and has started preparing for a ban, Chancellor John Healey has told News.
Diesel prices in the UK reached a new high on Monday due to supply pressures springing from the US-Israel conflict with Iran and Russia’s war with Ukraine.
Fuel prices are rising globally and US President Donald Trump has threatened to ban diesel exports, stating at the weekend: “We’re thinking about it very seriously.”
Healey, who admitted that UK diesel prices are “extreme”, said the government was in discussions with the US, adding: “We’re also making the provision that we may need to and we have our own stocks in the UK.”
Speaking on the sidelines of the annual Labour Party Conference in Liverpool, Healey said: “We work very closely with the Americans.
“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.”
The UK depends on the US for around a third of its diesel imports and a ban would send prices even higher.
US sources suggest that Trump is considering a ban to attempt to bring down prices for domestic consumers ahead of the critical midterm elections.
The has contacted the White House for comment.
In the UK, the average price for a litre of diesel reached 199.33p on Monday, according to the RAC motoring organisation, surpassing a previous high of 199.09p in June 2022 after Russia launched its full-scale invasion of Ukraine.
Petrol prices are also still rising, with a litre currently costing 174.23p.
Over the past seven months, the Iran war has severely disrupted the production and transportation of wholesale oil across the region, causing the price of fuels made from oil to surge.
The RAC said diesel prices had entered “uncharted territory” and served as a reminder of “just how exposed the UK is to events occurring far away”.
Healey said he was “very aware” of these cost of living pressures as he prepared what he called a “breathing space” Budget on 28 October.
A freeze on fuel duty, first implemented by the Conservative government in 2022, is due to expire at the end of the year. Duty is scheduled to increase by 3p in January and a further 2p in March.
Healey said: “Fundamentally, what we need is a settlement in the Middle East. We need an easing of the pressure of costs on business, the costs on households and on ordinary families that we see at the pumps in the most extreme level today for diesel.”