Diesel broke through the £2 barrier in the UK this week; a new, and unwelcome, all-time high:

Source: The Guardian

 

We all read the reasons in the headlines – Hormuz, Russia, Bab el Mandeb etc. Oil is getting harder to move around the world.

But, then, why isn’t unleaded also at an all-time high?

The best analogy is to bacon.

Source: Smithfield Foods

 

Different parts of a pig provide different cuts of meat – chops, ribs, loin, hock etc. No matter how good the butcher, they can only get so much bacon from a pig (around 15%, depending on your butcher).

If customers suddenly want a lot more bacon, they need a lot more pigs … and if demand for chops and loin isn’t rising, that might end up being wasteful, and non-profitable.

A barrel of oil is the same.

42 gallons of “crude” oil gets split up into lots of different products by the refinery, as this rather bland diagram from the US shows.

Source: US EIA/7IM

 

Basically for every barrel of crude oil, you get almost twice as much petrol as diesel. Some clever chemistry can tweak that a bit, but you can’t turn loin into bacon.

And that’s a problem, because our transport system works to the opposite ratio.

UK Demand for Diesel and Petrol

Source: https://www.gov.uk/government/statistics/petroleum-chapter-3-digest-of-united-kingdom-energy-statistics-dukes

 

In 2025, we used 21 million tonnes of diesel, compared to 12 million tonnes of petrol – nearly twice as much diesel as petrol.

There’s a mismatch.

It wasn’t an accident. For nearly two decades, efficient engines and CO₂-based taxation encouraged motorists and company fleets to buy it. By the time those incentives reversed (remember diesel-gate?), Britain had built a vehicle fleet, freight network and fuel-import system around diesel.

Usually, global trade bridges the gap. Britain exports surplus petrol and imports the diesel it needs. But the specific disruption to refineries and shipping routes in 2026 means that the UK has a bigger problem than most other nations.

We’ve developed a taste for bacon. And unfortunately, the only thing on offer is chops.

 

*Disclaimer* This article is for general information only and does not constitute advice. The information is aimed at UK retail clients only.

All information is correct at the time of writing and is subject to change in the future. Data Source 7IM