Unleaded is produced from crude oil, and as global crude oil prices fluctuate, this impacts the pump price. However, the unleaded product’s cost only makes up 36% of the price you pay at the pump. So, where do the extra costs come from?
Maybe unsurprisingly, it’s tax. The majority of the pump price is made up from two taxes. Fuel duty, which is currently set at 52.75 pence per litre (ppl) for unleaded petrol and diesel, and VAT, which is set at 20%. Fuel duty was reduced from 57.95ppl to its current value in March 2022, and this change was intended to reduce the cost of fuel to support households and businesses at a time of very high oil prices. Motorists also pay 20% VAT on top of the total cost of the fuel, including the fuel duty, which means that the 52.75ppl fuel duty is actually 63.3ppl at the pump. Over 54% of the price of unleaded and over 52% of the diesel cost at the pump is tax.
The unleaded that you put in your vehicle is a blend of crude oil derived fuel and ethanol, and in diesel, biodiesel is blended at up to 7%. The renewable part of the fuels makes up around 2% of the total cost.
There is also a cost to move the fuel from the refinery and terminals around the UK into the petrol stations. This is typically less than 1% of the total cost of fuel.
The remaining cost is the retailer’s margin, which is usually around 5-7% of the total cost of fuel.
SHOCKING
Nothing but greedy sods,in Australia it’s just over £1per litre for petrol. 😡😡😡
Just checked Cost on Lanzarote, €1.14 /litre , and that’s an island with no resources or refineries
How unusual! The loss of fuel revenue to the Government by people using electric cars is obvious, as is the reluctance of Politicians to push forward a good electric charging infrastructure. This is a world-wide issue, though. Our reliance on fossil fuels could have been far less a long time ago, but too many Politicians and the Fuel companies have hindered progress – they would all lose money!
I remember way back when a barrel of oil was 80 dollars you could get 2 gallon and got change from a pound a gallon today cost between 8-10 a gallon . The rice of a barrel of oil today has not increased that that much
Today fuel is a cashcow for evey Govenment. And as fuel prices increase it has a knock on effect on anything we buy, it poor economic.
Aye, and just waiting until the budget to see how much of a tax hike we get. 5% is optimistic, 10% would not surprise. One of the most scandalous parts is the fact that the government slap their fuel duty on, then they slap VAT on top, so you are paying vat on the tax you are already being extorted of.