Fuel duty is a fixed government excise tax charged on every litre of petrol or diesel sold in the UK, currently 52.95p per litre. It is the same at every filling station. VAT at 20% is then added on top, meaning tax accounts for roughly 60–65p in every pound spent at the pump.

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What is fuel duty?

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Fuel duty is a fixed government excise tax charged on every litre of petrol or diesel sold in the UK, currently set at 52.95p per litre. It is one of the largest components of the price you pay at the pump, sitting on top of the wholesale fuel cost, retailer margin, and VAT.

How Fuel Duty Works

Fixed rate per litre: Fuel duty is charged at a flat rate regardless of the pump price — currently 52.95p on every litre of unleaded petrol and diesel. It is collected from fuel suppliers before the fuel reaches the forecourt. 2

VAT is charged on top: VAT at 20% is then applied to the total price including duty, meaning you effectively pay tax on a tax. This makes VAT the second-largest tax component in the pump price. 4

Combined tax burden: Together, fuel duty and VAT account for roughly 60–65p in every pound spent at the pump, making UK fuel among the most heavily taxed in Europe. 3

History and the Freeze

5p cut in March 2022: In response to soaring pump prices, the government cut fuel duty by 5p per litre in March 2022 — the largest cash-terms cut ever. That reduction has been extended and remains in place. 3

Over a decade without a rise: Fuel duty was frozen at 57.95p for over 12 years before the 2022 cut. Successive governments have avoided raising it due to the direct impact on household budgets. 3

Significant Treasury revenue: Despite the freeze and cut, fuel duty still raises around £24–25 billion per year for the UK government, making it one of the largest single sources of excise revenue. 3

What This Means for Pump Prices

Duty is the same everywhere: Every UK petrol station pays the same fuel duty rate, so differences in pump prices between stations come down to wholesale costs, location, and retailer margin — not duty. 4

Wholesale price drives day-to-day changes: Because duty is fixed, the rises and falls you see at the pump are driven by crude oil prices, the sterling/dollar exchange rate, and retailer pricing decisions — not changes in tax. 1

Finding the Cheapest Price Despite Fixed Duty

Retailer margins vary significantly: While duty is identical at every pump, retailer margins can differ by 10p or more per litre between stations just miles apart, meaning where you fill up still matters. 1

Compare live prices near you: CheckFuelPrices shows live petrol and diesel prices at 4,000+ UK stations, updated every 30 minutes using CMA open data, so you can find the cheapest forecourt in your area. 1