UK Diesel Above £2 Puts Coach Services and Hauliers Under Pressure
Britain's coach operators say they may have to cut services including school transport as diesel holds above £2 a litre. Hauliers warn rising fuel costs are pushing hundreds of firms out of business.
The average price of diesel on UK forecourts hit a fresh record of more than £2 a litre in the week before 5 October 2026, according to The Guardian. The record followed a fast climb through late September and early October. Reuters reported the price at 199.18 pence per litre on 28 September amid record highs, then at £2 ($2.64) per litre for the first time on 2 October 2026, according to Reuters. Filling an average family car with diesel cost almost £110 in early October. Reuters linked the September highs to the impact of the Iran war.
Alison Edwards is director of policy at the Confederation of Passenger Transport. The Confederation notes that 85% of independent coach operators are family businesses. Local bus operators in England received subsidies to help cover fuel running costs, while coach companies received no equivalent support. A subsidy is a government payment toward running costs. That difference affects school contracts, tour work and scheduled coach services, where operators cannot easily pass weekly fuel rises on to customers.
Richard Smith is managing director of the Road Haulage Association. Haulage businesses typically operate on profit margins of about 2%, or about £2 of profit for every £100 of income. Hauliers were paying an extra £350 a week for each truck compared with before the Iran war. Hundreds of transport businesses went bust in 2026 before October. Direct Connect Logistics, which runs 22 lorries out of Oxfordshire, Northamptonshire and Warrington, is among the fleets operating in that environment.
An RHA survey in June found fuel prices had risen by 35% since the Iran conflict began, with only 4 in 10 operators confident of surviving as fuel prices soared, according to the RHA. Fuel costs amount to around 31-36% of running costs for the average 44-tonne vehicle fleet, the standard large lorry. The total cost of operating an HGV, a heavy goods vehicle, increased by 6% over the past 12 months, following a 10% increase from 2023-24, according to the RHA.
Hauliers called for a pause on planned fuel duty rises and a rebate to offset diesel costs. Fuel duty is tax added to the pump price, and a rebate returns part of that cost. The RAC called for the government to expand its 5p cut in fuel duty, which had been extended until the end of 2026. The RHA has previously called for an essential user rebate of 15p per litre. At the international level, G7 leaders said they would release up to 100m barrels of emergency diesel and crude oil stockpiles, or stored reserves.
Brent crude settled down 6 cents, or 0.06%, at $102.25 a barrel on 2 October 2026 after Europe agreed to tap diesel reserves. U.S. West Texas Intermediate crude finished down $1.76, or 1.90%, at $91.11 a barrel on the same day, according to Reuters.
The broader context here is that the dispute is less about the pump price alone than about who absorbs volatility. Coaches on fixed local-authority school contracts and hauliers on thin annual rates have limited room to reprice. Duty relief would act quickly on cash flow. Reserve releases work through wholesale markets with a lag. Neither resolves the split between subsidised local bus operations in England and unsubsidised coaches, or the exposure of small family fleets to a cost line that now accounts for nearly a third of running costs. If forecourt prices stay above £2, contract defaults, service withdrawals and further failures become the transmission mechanism to schools, supply chains and ultimately consumer prices.
