UK has dubious honour of having the most expensive diesel in Europe

28th May 2024

The UK now has the dubious honour of having the most expensive diesel in Europe despite the current 5p-a-litre fuel duty discount introduced in March 2022, new data from the RAC reveals.

The average price of diesel at UK pumps is currently 155p which makes it 5p more expensive than both Ireland and Belgium on 150p, based on the latest European data available*.

Although duty on both petrol and diesel was cut from 57.95p to 52.95p in spring 2022 to ease the burden of rapidly rising fuel prices following Russia’s invasion of Ukraine, the UK still has the highest rate of duty on diesel in Europe alongside Italy. Despite this, diesel in Italy is still currently 7p cheaper than the UK, at an average of 148p a litre.

France’s duty rate is only the equivalent of a penny lower than the UK (52p) but its average price for diesel is 9p less at 146p. In Belgium, where duty is the equivalent of 2p less than the UK at 51p, its diesel is 5p cheaper at 150p.

Interestingly, while France has the same VAT rate as the UK at 20%, Italy and Belgium have higher rates at 22% and 21% respectively, yet still charge less at the pumps. In Ireland, where diesel at forecourts is 5p less than the UK at 150p, duty is also 6p less at 47p a litre but notably VAT is 3% higher at 23%.

By way of comparison, the UK’s petrol is only the 11th most expensive in Europe at an average of 149p, in stark contrast to the priciest petrol which can be found in Denmark at an average of 175p. That said, duty in Denmark is far higher than in the UK – the equivalent of 59p, with VAT at 25%.

RAC fuel spokesman Simon Williams said: “Having the most expensive diesel in Europe despite the current 5p duty cut is a very dubious honour.

“This is explained by RAC Fuel Watch calculations which show the average retailer margin on diesel – that’s the difference between the delivered wholesale price and the retail price before VAT – is 18p. That’s a shocking 10p more than the long-term average of 8p.

“Despite the RAC bringing the issue to the attention of Energy Secretary Claire Coutinho in a letter just over a week ago, the price of diesel at the pump has barely fallen, even though the wholesale prices of petrol and diesel are identical at just 111p a litre. The average price of a litre of diesel should really be down to around the 145p level if retailers were charging fairer prices. The margin on petrol is also, in our view, unreasonably high at 13p.

“We can see no good reason why retailers in Great Britain aren’t cutting their prices at the pumps. It’s important to note that in Northern Ireland, where there is greater competition for fuels in the absence of supermarket dominance, the average price of diesel is just 144.9p – 10p less than the UK average, and petrol is 6p cheaper at 142.4p.

“There is cause for hope for fairer fuel prices in the future as the Digital Markets, Competition and Consumers Act became law on Friday, giving new powers to the Competition and Markets Authority to closely monitor road fuel prices and report any sign of malpractice to the Government.”

Drivers looking to save money on their fill-ups should take advantage of the fuel finder feature in the free myRAC app. The app can be downloaded for free from the App Store or Google Play.

Up to nine searches a day can be made over a two, five or 10-mile radius, with each giving the five cheapest prices.

^{* UK average pump prices quoted are based on Competition and Markets Authority data. European prices are from the}^{European Commission’s Weekly Oil Bulletin}^{. Latest data is for 20 May. Margins are calculated based on wholesale data, oil price and the value of sterling provided by Fuel Prices Online.}