New data from the RAC reveals that despite a 5p-a-litre fuel duty discount introduced in March 2022, the UK now holds the title for the most expensive diesel in Europe.
Diesel at UK pumps is currently priced at an average of 155p per litre, making it 5p more expensive than in Ireland and Belgium, based on the latest European data available.
Even though fuel duty for both petrol and diesel was reduced from 57.95p to 52.95p in spring 2022 to alleviate the impact of escalating fuel prices following Russia’s invasion of Ukraine, the UK still maintains the highest rate of duty on diesel in Europe, tied with Italy. However, diesel in Italy is currently priced at 7p less than in the UK, averaging 148p per litre.
France's duty rate is only 1p lower than the UK's (52p), yet the average diesel price in France is 9p cheaper at 146p. Similarly, Belgium's duty rate is 2p lower than the UK's, but its diesel is 5p cheaper at 150p.
Interestingly, although France shares the same VAT rate as the UK at 20%, Italy and Belgium have higher rates at 22% and 21% respectively, yet their pump prices are lower. In Ireland, where diesel is priced 5p less than in the UK at 150p, the duty is also 6p less at 47p per litre, but VAT is notably 3% higher at 23%.
Compared to other European countries, the UK ranks 11th for petrol prices, with an average of 149p per litre. The highest petrol prices are in Denmark, averaging 175p per litre. However, Denmark's fuel duty is significantly higher than the UK's, equivalent to 59p, with VAT at 25%.
Simon Williams, the RAC fuel spokesman, expressed his concern stating, “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.”
There is optimism for fairer fuel prices with the implementation of the Digital Markets, Competition and Consumers Act, which grants new powers to monitor road fuel prices and address any malpractice.
