The price of diesel on UK forecourts remains stubbornly close to October’s record high of £2 despite a sharp fall in oil prices.

A litre costs an average of 197p, according to the AA, which described the situation as “dismal”. By contrast, petrol has fallen 6p to 168p from the peak of 174.7p in early October. That was the highest level since August 2022.

High fuel prices are putting huge financial strain on households and businesses and Christopher Waller, a US Federal Reserve governor, told a conference in London this week that energy prices could remain “elevated”.

He said a rise in tanker traffic through the strait of Hormuz came at a price: “The insurance now needed for ships making this passage, and the ship-to-ship transfer of oil necessary to guard against Iranian attacks, are reportedly boosting oil prices by $20 to $30 a barrel.”

Diesel production is also being affected by limited refining capacity and other constraints, Waller said, adding: “As a consequence, elevated prices for diesel in the…