How countries are responding to oil price surge due to Iran war – from free bus travel to four-day working week
When Iran’s Supreme Leader, Ayatollah Ali Khamenei, was killed in a joint American and Israeli strike four weeks ago, there were immediate hopes for peace and security in the war-torn region, as Donald Trump urged the Iranian people “to take back their country”.
But as Iran’s new leaders went underground, and missiles started firing at neighbouring Middle East countries, it soon became clear here was to be no quick resolution.
Despite the US president continuing to push a narrative around peace talks and fresh threats, markets appear to remain more skeptical than ever, with oil prices hitting $117 a barrel on Monday, triggering further fears of shortages worldwide.
The issue is that Iran has effectively blocked the Strait of Hormuz, a critical route through which roughly a fifth of the world’s oil supply is transported. This is forcing governments around the world to take action to safeguard their national interests. Here we take a look at what countries are doing:
Diesel prices reached their most expensive level on Monday (30 March) since December 2022, with the average price of a litre of the fuel at UK forecourts hitting 181.2p according to RAC analysis.
In response, chancellor Rachel Reeves has been urged to reconsider plans to raise fuel duty by 5p per litre at the end of August,
In response, chancellor Rachel Reeves has been called on to back down on plans to increase fuel duty by 5p per litre at the end of August – but no announcement has been made so far, and Sir Keir Starmer gave no indication to reporters on Monday.
Last week, Ms Reeves said contingency planning was underway for “every eventuality” after acknowledging that the full impact of the war on the UK economy was uncertain. A second Cobra meeting, where senior ministers will discuss the ongoing economic hit caused by the war, takes place on Monday.
Under previously-announced plans, energy bills will fall from April under Ofgem’s price gap – but that could rise again before the summer.
The governments of Tasmania and Victoria have made public transport free from this week in a bid to ease the cost of living as the price of petrol and energy soars.
Arguably the country imposing the most severe restrictions is Egypt, which relies heavily on imported fuel. From last weekend, restaurants, shops and cafes have been told to close by 9pm each night to save energy.
Menawhile, street lights and roadside advertising has been dimmed. Many people have also been told to work from home at least one day a week.
The military government has brought in fuel rationing which allows customers to buy it once or twice a week depending on the size of their vehicle engines. This follows an announcement to impose driving restrictions for private vehicles to preserve petrol.
Government employees have also been ordered to work remotely every Wednesday.
