Fleets are being warned by analysts that the tightening of sanctions in Russia could lead to diesel pump prices rising to £3 per litre.

The UK imports a third of its diesel from Russia, and the economic sanctions already imposed have led to the loss of three million barrels a day. Forecourt prices of £3 for a litre of diesel are ‘not unrealistic’, with analysts fearing the worst is yet to come.

Nathan Piper, head of oil and gas research at Investec, told MPs on the Treasury Committee that consumers should expect ‘continued increases’ in fuel prices through the rest of this year. The lack of spare capacity in the oil market has exposed the UK to sharp price fluctuations.  

‘Our refineries make petrol; that is what they are set up to do,’ said Piper. ‘Diesel is much more what the consumer uses, but that is what we import the most of. That is the higher prices, because we import it; that is the biggest exposure, so diesel prices are more likely to trend even higher than petrol prices.’

Amrita Sen, director of research at Energy Aspects, also gave evidence. She explained that ‘the real problem is that supplies are not reacting’. OPEC has some capacity that it can bring forward, but not enough to offset Russia. ‘Given the sky-high prices that we are talking about for refineries, we may not even have enough crude to make diesel.’ Sen believes that petrol prices could rise to £2.40 a litre, and diesel could get close to £3.

Diesel prices have risen 40% year on year – and will almost certainly go higher, squeezing the budgets of vehicle fleets even further.

Paul Holland, managing director of UK Fuel at Fleetcor, said that ‘we are seeing price swings of 10p per litre per day, which is previously unheard of. Although this seems to be easing, the fact that there could be significant price changes from day to day means that it is difficult for companies to predict future spending.’

‘Although major companies with significant credit might be able to weather the storm, smaller companies may not’, warned Holland.