Overview:
- At 53p a litre, the UK has the highest duty on diesel and the ninth highest duty on petrol compared with EU member states.[1] This is higher than Belgium, over 23 per cent more than Spain, and almost double that paid by motorists in Malta.
- If the UK does not extend the 5p cut in fuel duty, the cost of duty for diesel and petrol would rise to 58p a litre. This would make the UK have the sixth highest duty on petrol when compared with EU member states and make duty on diesel more than double that paid by motorists in Bulgaria and Malta.
- The UK pays 6p a litre above the EU average on petrol and 16p a litre more on diesel.[2]
- Malta has the lowest petrol and diesel duties among EU member states at 31p a litre and 28p a litre, respectively. UK motorists pay 22p a litre more on petrol and 25p a litre more on diesel than those in Malta.
- The UK duty on petrol is 14p a litre less than the Netherlands, who have the highest petrol duty in the EU. Duty on diesel in the UK is 9p a litre more than the Netherlands, rising to 14p a litre if the fuel duty cut isn’t extended.
- The average price of petrol in the UK is £1.35 a litre.[3] This means that petrol duty is equivalent to 39 per cent of a litre of petrol. This is the seventh highest percentage when compared with EU member states. The Netherlands has the highest percentage with fuel duty accounting for 43 per cent of the average litre of petrol.
- Duty accounts for 38 per cent of the average cost of a litre of diesel in the UK. This is the third highest percentage compared to EU member states with only Italy and France having a higher percentage share.
- The UK has the tenth highest average cost per litre of petrol compared to EU member states. Per litre of diesel, motorists in the UK pay £1.39 on average which is the highest price per litre compared to EU member states.
- The average fuel capacity of a car is 53.5 litres.[4] This means that on average in the UK, £28.36 is paid in fuel duty to fill a car’s fuel tank.
- VAT is currently charged after fuel duty has been applied. If VAT were charged before fuel duty was applied, it would save 11p on the average litre of petrol or diesel.
- Tax on fuel, including duty and VAT, accounts for 56 per cent or 55 per cent of the average cost of a litre of petrol or diesel respectively.
READ THE BRIEFING NOTE
[1] HM Revenue & Customs, Extension to the cut in fuel duty rates to March 2025, 6 March 2024, www.gov.uk/government/publications/fuel-duty-extending-the-temporary-cut-in-rates-to-march-2025/extension-to-the-cut-in-fuel-duty-rates-to-march-2025, (accessed 14 October 2024).
[2] European Commission, Taxes in Europe Database v4, www.ec.europa.eu/taxation_customs/tedb/#/advanced-search/advanced-search-result, (accessed 11 October 2024).
[3] RAC, European fuel prices – Petrol and diesel prices in Europe, 30 September 2024, www.rac.co.uk/drive/travel/advice/european-fuel-prices-petrol-and-diesel-prices-in-europe/, (accessed 11 October 2024).
[4] Mechanic Base, What is the capacity of a car’s gas tank?, 7 January 2023, www.mechanicbase.com/cars/average-gas-tank-size/, (accessed 11 October 2024).