Diesel v Petrol, why the price difference?


 
The average gap in the UK between petrol and diesel prices is now 9p per litre – compared with 4p in September 2018. So why?

 

Wholesale prices. The cost the petrol station have to pay is around 37p per litre for petrol and 45.5p for diesel, the Treasury adds 57.95 pence to each litre through fuel duty, and another 20 per cent through VAT, the petrol station makes 2-5p per litre or much less if part of a supermarket group.

 

Diesel prices generally rise at this time of year due to increased European demand for heating oil which is produced from the same ’part of the barrel’. The UK refineries cannot produce all the diesel we need and therefore we have to import it, the weaker exchange rate does not help with this and as a result the price difference between petrol and diesel is at its highest point.

 

It now costs £6 more to fill up a diesel Mondeo than a petrol one. It is not the case that once we all switch to petrol cars the Government will tax petrol more and diesel will be the cheaper option, it is demand led and once the UK refineries can supply all the diesel we need the price difference will flatten out.