What are petrol prices likely to do in 2025? The simple answer is: there is no simple answer.
You only have to look at recent years, where we’ve seen sudden surges and spikes in response to events like the war in Ukraine, or supply issues caused by a lack of lorry drivers.
While things are definitely uncertain, the short term trend is fairly clear. In January 2025, fuel prices went up for the 4th month in a row. The following factors could keep that trend going, or buck it.
Government policy.
The fuel duty freeze is staying in place. That’s one bit of news that will help keep prices down. There are other bits of legislation that might lead prices to fall:
Low emission zones: In 2025 many cities will be introducing or expanding Low Emission Zones. By deterring driving, these zones could help reduce demand for petrol – which in turn would be a downward pull on prices.
EV adoption: Plans are still in place to halt the sale of new petrol only cars by 2030. This is likely to increase the rate at which drivers are choosing EVs when investing in new cars. By reducing demand for petrol, this could help dampen prices.
Carbon taxes: Increasing carbon taxes could potentially increase the cost associated with producing and distributing petrol – and that would probably be passed on to drivers.
Fuel finder: The Government’s fuel finder initiative would make it easier for drivers to compare prices and find the best deal. That could potentially have a fairly big impact, because fuel prices vary quite a lot. This could push suppliers to price match, which should make things cheaper.
Currencies.
Oil is traded in US dollars (USD), so the stronger the pound (GBP) is against the dollar, the more we get for our money and the better fuel prices are. Currencies are volatile (meaning they can yoyo up and down quite rapidly) so it’s very (very, very) hard to make solid predictions.
That said, many forecasters seem to think the pound will get stronger against the dollar over the year. That could help keep fuel more affordable.
Oil prices and geopolitics.
When it comes to oil prices, things get a bit sticky. And that’s not just an incredibly brilliant pun. Supply is widely predicted to increase in 2025. Demand is expected to increase to – but to a much lesser extent. You would expect this to push prices down.
However, that assumption would depend on international trade running smoothly. That would depend on everyone getting along. Sadly, that’s often far from being the case. Iran, for example, is a major oil producer and if supply from Iran was disrupted (due to sanctions or some other political policy) that could push prices up. And of course, there are infinite other possibilities.
So, what’s the conclusion on petrol prices in 2025?
There are reasons to be optimistic that petrol prices in 2025 won’t hit the highs we saw in 2022, it is extremely hard to say if they will actually go up or down. The only way you can be 100% sure to cut the amount you spend on petrol is to use less.
With that in mind, check out our tips on fuel efficient driving – and get some inspiration for journeys you might be able to cut out.
Using the car less anyway? Then you may be a lower mileage driver. If so, be sure to get a quote for our pay-by-mile car insurance.
