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UK Fuel Price Outlook 2026 to 2036
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Petrol and diesel pump prices: statistical baseline and sourced scenarios
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Prepared by Abdul Mohi Choudhry | Version 1.0, 7 October 2026 | Price data to 28 September 2026 | Tools: R and Excel
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PURPOSE
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What this isA 10-year look at where UK petrol and diesel pump prices could go. It combines a statistical baseline (an ARIMA time-series model built in R) with three transparent scenarios built in Excel from published oil price, inflation and fuel duty assumptions. It is an analytical exercise: the results are conditional projections, not predictions, and not financial advice.
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KEY FINDINGS (default assumptions, pence per litre, September 2036)
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PetrolToday (Sep-26 average) 169.5p. Statistical baseline 169.1p (80% range 91p to 247p). Scenarios: Low 167p, Central 214p, High 238p.
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DieselToday (Sep-26 average) 192.5p. Statistical baseline 176.3p (80% range 110p to 242p). Scenarios: Low 195p, Central 242p, High 266p.
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Prices are at a spikeDiesel rose from about 142p in February 2026 to about 198p by 28 September 2026, and petrol from about 132p to about 173p, following an oil price shock linked to the 2026 Middle East conflict.
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Model accuracyIn normal conditions the ARIMA model beat a "no change" benchmark by about a quarter (backtest Jan-24 to Feb-26, RMSE: petrol 5.3p vs 7.1p, diesel 6.2p vs 8.1p). Including the 2026 spike it did no better than the benchmark (petrol 9.8p vs 9.6p, diesel 16.0p vs 15.6p). Past prices alone cannot anticipate shocks.
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Why scenariosThe statistical range for 2036 is very wide, so assumptions matter more than the model. The Central scenarios imply roughly +26% for petrol and +25% for diesel by 2036, driven mainly by general inflation and fuel duty returning to its pre-2022 level and then rising with RPI.
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HOW TO USE THIS WORKBOOK
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Switch fuelOn the Scenarios sheet, choose Petrol or Diesel in cell B3. The starting price, summary table, scenarios and chart all update.
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Change assumptionsSourced inputs are on the Assumptions sheet (blue cells). The Low scenario duty inputs on Scenarios (C12:C13, yellow) can also be changed.
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Data checkCell M2 on Forecast_Data should read "OK". It warns if the diesel forecast columns are incomplete or repeated.
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SHEET GUIDE
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Weekly_DataOfficial weekly UK average pump prices (petrol and diesel, p/litre) from 1 Jan 2018 to 28 Sep 2026, with fuel duty, VAT, diesel premium and tax share of the price.
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MonthlyMonthly averages of the weekly prices (105 months). This is the series used for the R forecasts.
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AnnualCalendar-year averages and year-on-year change. 2026 is year-to-date.
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Forecast_Data120-month statistical forecast (Oct-26 to Sep-36) for petrol and diesel from R, with 80% and 95% ranges.
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ScenariosLow, Central and High pump-price scenarios against the statistical baseline, with a summary table and chart. Choose the fuel in B3.
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AssumptionsEvery scenario input with its source, including the DESNZ oil price table.
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Scenario_CalcMonth-by-month workings behind the scenarios (formulas only).
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ChartsWeekly, monthly and annual price charts, plus the R forecast charts for petrol and diesel.
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METHOD
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Data preparationWeekly Monday prices averaged to calendar months (Jan-18 to Sep-26, 105 months).
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Statistical baselineARIMA models fitted automatically in R (forecast package): petrol ARIMA(2,1,2) with no drift; diesel ARIMA(2,1,2)(0,0,1)[12], which adds a seasonal moving-average term. Each forecasts 120 months with 80% and 95% ranges.
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BacktestModels trained on Jan-18 to Dec-23 and tested from Jan-24 against a "no change" (naive) benchmark. ETS was also tested and performed poorly, so it is not used.
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ScenariosPump price = (crude oil cost + other costs + fuel duty) x (1 + VAT). Crude cost = Brent x 100 / (litres per barrel x GBP/USD). Brent moves from today's level to the DESNZ low, central or high path over one year. Other costs (refining, distribution, retail margin) grow with inflation. Fuel duty follows the stated policy in Central and High, and is frozen in Low.
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DATA SOURCES
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Pump pricesDESNZ, Weekly road fuel prices (GOV.UK).
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Oil price scenariosDESNZ, Fossil Fuel Price Assumptions 2025 (GOV.UK, January 2026): low, central and high Brent paths in real 2024 prices.
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Current oil priceUS EIA, Short-Term Energy Outlook, September 2026: Brent averaged $91 a barrel in August 2026 (eia.gov).
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InflationOffice for Budget Responsibility, Economic and fiscal outlook, March 2026: CPI 2.0% from 2027, RPI about 2.9% a year in 2027 to 2029 and 2.4% long run (obr.uk).
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Fuel dutyHMRC and HM Treasury, Amended Fuel Duty rates for 2026 to 2027 (GOV.UK, 22 May 2026): 5p cut extended to 31 December 2026.
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Exchange ratePound Sterling Live: USD/GBP 2026 average 0.7441, about 1.34 GBP/USD, held constant.
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ASSUMPTIONS AND LIMITATIONS
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1. Not forecastsThe scenarios are conditional projections. DESNZ describes its oil prices as assumptions for stress-testing, and its short-term values were set before the 2026 Middle East conflict.
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2. Fuel dutyAssumes the 5p cut ends on 1 January 2027 with no staging, then RPI uprating from April 2027. The Budget and OBR forecast due on 28 October 2026 may change this. The Low scenario freezes duty at 52.95p, which is the author's assumption and not an official forecast.
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3. Fixed inputsGBP/USD is held at 1.34, CPI is 2.0% from 2027, and Brent converges to the DESNZ path over one year (a judgement based on the EIA outlook).
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4. Diesel marginOther costs are held constant in real terms from today. Diesel margins are unusually high now (diesel is about 24p above petrol, against 5p to 10p normally), so the diesel scenarios may be too high.
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5. Statistical modelUses past prices only, from one train and test split on a short series. Its ranges widen quickly and it cannot anticipate shocks.
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6. DataMonthly figures are averages of weekly Monday prices. 2026 is not a full year.
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COLOUR LEGEND
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Blue textHardcoded source data or input.
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Black textFormula.
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Green textLink to another sheet.
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Yellow fillCell you can change.
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