Farmers in both the UK and US are facing an “astronomical” increase in the cost of diesel, a crucial fuel for their vehicles and machinery. Red diesel, used in agricultural vehicles and taxed at a lower rate, has seen its price jump by 10p to 14p a litre since Monday, a rise of approximately 10% from its current cost of about £1.10 a litre.
This surge is linked to renewed fighting between the US and Iran, which has driven up crude oil prices. Additionally, Russia extended its ban on diesel exports last week, further impacting market prices. An intensification of Middle East hostilities over the weekend also contributed to higher fuel costs, according to Alex Harrison, a fuel buyer at Fram Farmers.
For UK motorists, the average price of diesel reached 183.5p a litre on Thursday, an increase from 164.5p in mid-July. In the US, diesel prices have climbed to their highest level in about four years, with the average price reaching $5.78 a gallon on Thursday, a 54% increase since the conflict in Iran began.
The volatility in oil wholesale markets is causing uncertainty for farmers regarding fuel purchases. Many growers typically buy more fuel at this time of year to prepare land for winter, despite the harvest peak demand having passed. Paraffin, or heating oil, also used on farms and in rural homes not connected to the gas network, is also higher, nearing £1 a litre compared to approximately 60p a litre before the Iran conflict.