Diesel hits £2 a litre and energy bills rise as Iran war drives cost-of-living crisis to new peak

From the Newshound archive · first published 1 October 2026 · last updated 2 October 2026.

Diesel has broken through the £2-a-litre mark, having climbed more than 40% since the Iran conflict began in February, while petrol stands at 174.8p a litre — a rise of nearly 34% over seven months. Ofgem's 4% energy price cap increase struck four million households yesterday, pushing the average direct-debit bill up by £5 a month. Charities and businesses warn they cannot absorb both shocks much longer, with forecasters already expecting the cap to reach £2,000 by January.

Freewheelers, a Yeovil medical-supply charity, has had to draw on its reserves and run emergency fundraising campaigns simply to continue its motorbike deliveries of blood samples.

The energy price cap is projected to climb to £2,000 by January, piling further pressure on households already struggling with fuel costs that are showing no sign of easing.