The G7 agreed on Friday 2 October to a coordinated release of 100 million barrels of crude and refined products from emergency reserves over four months, with implementation to be coordinated through the International Energy Agency. In their joint statement, the leaders committed to a “frontloaded substantial diesel release within the first 20 days” and asked the agency to report on implementation before that window closes. The leaders did not set out a breakdown of the volumes, or say which countries would take part. The IEA’s governing board is expected to decide the details at a meeting on 14 and 15 October.
The deal followed a threat from Donald Trump to restrict US diesel exports unless European governments released more of their own stockpiles. After the agreement, Trump said at the White House that a ban had never really been on the table, adding: “We’re not going to be doing the export ban, we’re going to be doing what we’re supposed to do.”
For Britain, the intervention came as diesel prices reached record levels. Diesel hit a record £2 a litre on forecourts on Friday, up about 40 per cent since the conflict with Iran began. Petrol is up around 31 per cent. Brent crude, about $73 a barrel before the war, has been trading near $100.
The relief has landed in the same week as figures that set out the scale of the money at stake. HMRC’s latest monthly receipts show VAT receipts of £80.6bn between April and August 2026, £3.8bn higher than the same period last year, and fuel duty receipts of £10.5bn, £0.3bn higher. Combined, that is £4.1bn more than a year earlier. HMRC cautions that a change to the way it records VAT receipts from April 2026 means year-on-year VAT comparisons “should be interpreted with caution”. The fuel duty comparison is not affected by that change.
Separately, Bloomberg has estimated that if pump prices hold at current levels the government could collect about £3.9bn more in VAT over the next 12 months than if prices had stayed near pre-war levels. That is a projection, not money already received, and it assumes drivers buy roughly the same quantity of fuel.
The larger question is what Britain has left to fall back on. The government says the UK is not facing a diesel shortage, but its reserve supplies run to about 42 days, among the lowest levels in Europe on Sky News analysis. More than half of the diesel consumed in the UK is imported. In 2025 the United States accounted for 31 per cent of those imports, with the Netherlands (26 per cent) and Belgium (11 per cent) supplying most of the rest, according to the government’s Digest of UK Energy Statistics.
Four refineries remain: Fawley, Stanlow, Pembroke and Humber. Fawley, the largest, is in the middle of a planned maintenance shutdown scheduled to run into December. Two more were lost in 2025. Grangemouth stopped refining in April and Lindsey went into administration in June before closing that October. Britain had 18 refineries in the early 1970s.
The government’s own call for evidence on the downstream oil sector, published in February, notes that fuel supply “remains the largest energy subsector, meeting 47% of final energy consumption in the UK”. The UK imported 15.5 million tonnes more petroleum products than it exported in 2025, a fifth more than the year before and the largest deficit since the country became a net importer in 2013.
The four surviving plants also face carbon costs that some overseas competitors do not. An analysis by Watt-Logic, published in August, estimated that UK refineries face a net cost of around £200m a year under the UK Emissions Trading Scheme, and a gross carbon-cost disadvantage of around £540m a year against refiners in countries with no carbon price. Paul Greenwood, managing director of ExxonMobil UK, which operates Fawley, is quoted in the report saying the company pays “£70 million to £80 million a year in CO2 costs”, rising to £150m within four or five years, while “our competitors are not paying any”. Those figures are the company’s and the analysis’s own assessments, not government statistics.
The government has taken some steps. In May it extended the temporary 5p cut in fuel duty to 31 December 2026 and cut the rebated rate for red diesel by 3.7p a litre from June. Under the current legislated schedule, the main rate of 52.95p a litre is due to rise to 55.95p on 1 January 2027 and to 57.95p on 1 March, returning to pre-2022 levels, though ministers have said final rates will be confirmed at the Budget. Separately, VAT on household electricity bills is being cut to zero for six months from 1 October, which the government says will save a typical household about £45 a year.
If Britain is asked to contribute to a further release, not all of its emergency stocks sit on British soil. As of July 2025, Reuters reported that about 15 per cent of the stocks counted towards the UK’s obligations were either held overseas through the IEA or held in Britain on behalf of other countries. The figure combines both categories.
A US export ban would have been difficult to manage in any case. American refining is concentrated on the Gulf coast, and moving large volumes to high-consumption states such as California is best done by ship. Under the Jones Act, cargoes moving between US ports must travel on US-flagged vessels. With too few qualifying tankers to carry all Gulf production, analysts warned that a ban could have pushed more diesel into storage rather than onto forecourts, forcing refiners to cut runs once tanks filled.
The planned G7 release is intended to provide time for Middle Eastern product flows to recover and for refineries elsewhere to raise output. Hamad Hussain, a commodities economist at Capital Economics, told Al Jazeera that the release would put “some downward pressure on prices, particularly global diesel prices”, but that “the impact would be short-lived given that this is just a temporary solution to the supply crunch”. If Middle Eastern flows do not recover, the next disruption will meet lower inventories than this one.
Great British PAC reaction
Claire Bullivant, chief executive of Great British PAC, said:
“President Trump has once again shown why a strong relationship with the United States matters to Britain. With the immediate threat to diesel supplies easing and the G7 committing to release emergency stocks, the Government has been handed some breathing space. It should use it wisely.
“Britain is dangerously exposed. We have just four refineries left and only around 42 days of diesel reserves, yet Labour’s answer is still to make motorists pay more.
“Since April, the Treasury has reportedly taken an extra £4.1 billion from VAT and fuel duty, and ministers are still planning another fuel duty rise in the new year. Families and businesses do not need another tax raid at the pumps, they need an energy strategy that puts resilience, domestic refining capacity and affordable fuel first.
“America understands that energy security is national security. Britain should be strengthening its own capacity and its relationship with our closest allies, not taxing motorists harder while leaving the country increasingly dependent on decisions made overseas.“
