UK holidaymakers face being hit by hidden travel costs worth hundreds of pounds this summer as a result of the ongoing oil crisis in the Middle East.
Package holiday providers are legally allowed to charge up to 8 per cent of the overall cost of a trip in the event of fuel or tax rises, even after purchase – and without offering a free cancellation.
The travel industry is widely expecting prices to rise in the coming months ahead of the summer holiday season as the conflict in Iran continues to drag on.
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It comes amid reports that the last known shipment of jet fuel arrived in the UK this week from the Middle East due to Iran’s ongoing blockade of ships in the Straits of Hormuz.
Under package travel regulations, companies are able to insert potential surcharges into their terms and conditions for unforeseen increases in costs of up to 8 per cent of the total cost of the holiday.
A travel industry source said: “It is very rare for it to happen, but it is in their terms and conditions so they have the right to do it.”
If the surcharge exceeds 8 per cent, they are legally obliged to offer an alternative holiday or a full free cancellation.
For a family of four, the additional costs could run into the hundreds of pounds.
A spokesman for UK travel association ABTA said: “If you have already booked your summer package holiday, be assured that there are very clear rules around surcharging, designed to protect you. Over the years it has been very rare that customers on package holidays have been asked for extra money, and there are strict limits on how much you might be asked for.”
Meanwhile, Government sources insisted there was no immediate threat to jet fuel supplies despite reports in the Financial Times that suggested the last known shipment from the Middle East was due to arrive in the UK this week.
A spokesman for Airlines UK said: “UK airlines are currently not seeing disruption to jet fuel supply and continue to engage with fuel suppliers and Government to monitor the situation.”
The UK imports around 38 per cent of its jet fuel from the Middle East, meaning the ongoing supply restrictions will begin to squeeze the sector in the coming weeks. The UK can rely on other sources, such as the Netherlands and the US, but shocks such as the Iran war can push up prices globally. This can then trickle down to consumers buying flights and holidays.
Jet fuel costs have soared in the wake of the US and Israel’s decision to attack Iran, with analysts stating that around one in 20 flights are being cancelled globally due to fuel costs jumping from $742 (£561) a metric tonne a year ago to around $1,710 (£1,293) today.
Travel industry insiders refused to speculate on the prospect of flights being cancelled over the summer holiday season, but analysts have warned of possible shortages of jet fuel if the Strait of Hormuz remains shut.
ABTA said it is “difficult to predict what will happen to prices for future holidays, with airfares just one part of the cost.”
Donald Trump said the UK and other countries which did not take part in strikes against Iran should secure the key shipping route themselves to counter rising fuel costs.
Posting on his platform Truth Social, the US President wrote: “All of those countries that can’t get jet fuel because of the Strait of Hormuz, like the United Kingdom, which refused to get involved in the decapitation of Iran, I have a suggestion for you: Number 1, buy from the US, we have plenty, and Number 2, build up some delayed courage, go to the Strait, and just TAKE IT.
“You’ll have to start learning how to fight for yourself, the U.S.A. won’t be there to help you anymore, just like you weren’t there for us.
“Iran has been, essentially, decimated. The hard part is done. Go get your own oil!”
It comes as Reform UK said it would cut the tax on short-haul flights for adults travelling with children as it looks to capitalise on the crisis in the Middle East.
The party’s Treasury spokesman, Robert Jenrick, said they would cut air passenger duty to save the average family of four £45 off their flights at a cost of £166m to the Exchequer.
Opposition parties argued the tax cut was “half-baked” and a “gimmick”.
PM’s cost-of-living measures come up against rising household expenditure
Sir Keir Starmer has trumpeted a raft of government measures aimed at alleviating the cost of living crisis coming into force on Wednesday, despite the prospect of household expenditure going up due to the Iran war.
The Prime Minister highlighted rises to the national living and national minimum wage for millions of workers, while also hailing the decision announced in last year’s autumn Budget to cut energy bills by £117 as a result of shifting green levies onto general taxation.
Starmer said: “Today, millions of people up and down the country will see energy bills go down by £117, wages go up for the lowest paid, and more support will be available for people who need it most – because of the decisions this government has taken.
“But we must go further to bear down on costs, and that means pushing for de-escalation in the Middle East and a re-opening of the Strait of Hormuz. That is the best way we can bring down the cost of living for families and that is my focus.”
But it comes as respected energy analyst Cornwall Insight said its prediction for the watchdog’s price cap from July to September now stands at £1,929 for a typical dual fuel household – an increase of £288 or 18 per cent on April’s cap.