UK Diesel & Petrol Prices

11 February 2015 | Bruce Compton

The petrol prices and diesel prices in the UK has seen record highs in recent years, but what percentage of the money goes to where? How much of the fuel price is duty, how much is for the actual product, delivery and VAT? This article explains why we have the highs and lows, who gets what & all other fuel price related questions.

Why do petrol prices fluctuate

The price of diesel and petrol can fluctuate depending on a number of varying factors:

  • Global Events – Wars, fuel shortages and security threats to oil supplies
  • World Markets – Supply & demand, taxes, cost of crude oil & inflation
  • New Technology – The increasing alternative fuel sources & new alternative fuel sources for vehicles

We’ve all noticed the fluctuation of petrol prices in recent years, what has also been noticeable is the fairly steady increase in the price of fuel. In the space of only 5 years, the average cost of unleaded petrol between January 2007 and January 2012 increased by 45.3 pence, that’s an increase of 50%. In recent years we have seen the price of petrol grow to 140 pence per litre, but now this has seen a dramatic fall back to late 2007 prices, with unleaded petrol prices at 99.9 pence a litre at some petrol stations in February 2015.

Cost breakdown for a litre of fuel

So how are petrol prices made up, who gets what, how much do the government, oil giants and retailer receive per litre. The following diagrams show the breakdown of a typical litre of petrol and diesel.

uk unleaded petrol prices breakdownuk diesel prices breakdown

Fuel Duty

The fuel duty in Britain is currently the second-highest fuel duty in Europe, with 58 pence of every litre going to the treasury. This, plus the VAT being charged on every litre of fuel purchased means that currently (as correct February 2015) over 60% of the price of fuel we pay at the forecourt goes to the government. This generates over £40 billion in revenue, with only a fraction of that going back into the road network.

Fuel (Product)

The cost of the actual fuel product is the second largest part of the price you pay at the forecourt. This goes to the companies who supply and refine the crude oil into petrol and diesel at our pumps. With the cost of refining the crude oil into diesel being higher than petrol, this is reflected in the marginally higher price you pay at the pumps for diesel per litre over petrol.

Retailer & Delivery

The profit margin for the retailer is the smallest percentage of the price you pay for fuel. With high competition, duty and high product prices the retailer has little room for profit on the petrol prices or diesel prices in their forecourts.

Handy fuel links

Further petrol price information

Calculating your annual petrol and diesel costs

Fuel price breakdown calculator