The price you see

168.1p

per litre, petrol — 2026

Why is fuel so expensive?

The price at the pump is the result of several different costs, taxes and market factors. Not a simplistic answer — the full chain, examined honestly.

Where does the money from one litre go?

Follow one litre

Eight stops between the oil field and your fuel tank — clearly split between market costs and tax.

1
Crude oil
Company costs
The underlying commodity cost. Crude oil is traded internationally, and its price can change significantly based on global supply and demand.
2
Exchange rates
Company costs
Oil is generally traded internationally in US dollars. Changes in the pound-to-dollar exchange rate can affect the UK's cost of imported crude and refined products, independent of the dollar price itself.
3
Refining
Company costs
Crude oil has to be processed into usable fuels. Refining costs and margins can change depending on global supply and demand, refinery capacity, maintenance, and other market conditions.
4
Wholesale fuel
Company costs
Fuel is bought and sold through wholesale markets before reaching individual forecourts. Wholesale prices can move independently of the retail price and may change at different speeds.
5
Distribution
Company costs
Transportation, storage, terminals, logistics, and distribution infrastructure all add cost between the refinery and the forecourt.
6
Retailer / forecourt
Company costs
Filling stations have operating costs including staff, electricity, rent or property costs, maintenance, card-payment costs, business rates, insurance, and equipment. Where reliable data exists, we show estimated retailer margins — the difference between wholesale and pump price is not automatically pure profit.
7
Fuel Duty
Tax
A fixed government tax per litre, set by policy — distinct from any company cost in the chain above.
8
VAT
Tax
Charged on the fuel transaction, including the duty already added. The amount of VAT paid changes as the underlying taxable price changes.

Petrol (unleaded)

Live data

Wholesale fuel, refining & distribution75.8p (45.1%)
Fuel duty53.0p (31.5%)
VAT (20%)28.0p (16.7%)
Retailer / forecourt margin11.3p (6.7%)

As of 14 September 2026. Source: GOV.UK (fuel duty, VAT) and CMA Enhanced Road Fuel Monitoring report (retailer margin), via GOV.UK

Methodology: Fuel duty (52.95 pence/litre) and the 20% VAT rate are exact, verified figures from GOV.UK, calculated against an average pump price of 168.1p/litre (GOV.UK/DESNZ weekly road fuel prices, week commencing 14 September 2026). The retailer margin (11.3 pence/litre) is the CMA's reported average market-wide petrol margin for April 2026 (Enhanced Road Fuel Monitoring report, published via GOV.UK). 'Wholesale, refining & distribution' is the remainder after duty, VAT, and margin are subtracted — it is a calculated figure, not a separately published one, and bundles crude oil cost, refining, and distribution together since no further verified split was available. Because the margin figure and the pump price are from slightly different dates, this breakdown is an approximation, not an exact same-day figure.

We don't have a further verified split of "wholesale fuel, refining & distribution" into steps 1–5 individually — that level of detail isn't separately published, so we show it as one bundled, verified figure rather than guessing a finer split.

So why can it still cost so much?

The big question

Global oil prices

The UK does not control the global price of crude oil. Global prices can be influenced by many factors at once — no single event explains every price movement.

Worldwide supply and demand
OPEC+ production decisions
Geopolitical events
Wars and conflicts
Sanctions
Refinery disruptions
Inventories
Changes in global economic activity
Expectations about future supply and demand

Sources on global oil markets: the International Energy Agency (IEA), the U.S. Energy Information Administration (EIA), and UK government sources.

Why does the exchange rate matter?

The pound vs the dollar

Illustrative example — not a forecast

Say a barrel of crude oil costs a round $75 (a simplified illustrative figure, not a live quote). The table below shows how the sterling cost changes purely because of the exchange rate — even though the dollar price hasn't moved at all.

Weaker pound

£1 = $1.2000

£62.50

for the same $75 barrel

Current verified rate

£1 = $1.3353

£56.17

for the same $75 barrel

Stronger pound

£1 = $1.5000

£50.00

for the same $75 barrel

Current verified rate: £1 = $1.3353 (Bank of England, spot rate, 17 September 2026). Because crude oil and many petroleum products are traded internationally in US dollars, a weaker pound makes the same dollar-priced oil more expensive in sterling terms, and a stronger pound makes it cheaper — independent of any change in the oil price itself.

Crude oil is not petrol

Refining costs

INEOS Grangemouth oil refinery, Scotland, showing distillation towers, storage tanks and a flare stack against a daytime sky.

CRUDE ≠ PETROL

Refining turns crude oil into usable fuel

See the chain

Photo: kitmasterbloke, via Wikimedia Commons (CC BY 2.0)

Crude oil

Refinery

Petrol / Diesel

Wholesale market

Forecourt

The price of crude oil and the price of refined petrol or diesel are related but are not identical. Refining turns crude oil into usable fuels, and refining margins — the cost and profit associated with that conversion — can change independently of the crude oil price, depending on global refinery capacity, maintenance schedules, and demand for specific fuel types. This is one reason why a fall in crude oil prices does not necessarily mean pump prices fall immediately, or by the same amount.

An investigative question

Do prices rise faster than they fall?

The 'rocket and feather' question — evidence-led, not assumed.

HISTORICAL

“Rocket and feather” pricing — what regulators actually found

“Rocket and feather” describes a pattern where retail prices rise quickly when wholesale costs increase (like a rocket) but fall only slowly when wholesale costs decrease (like a feather). Do not assume this applies everywhere, all the time — here is what has actually been measured, and when.

RAC analysis, diesel & petrol — Oct–Dec 2022

Petrol wholesale costs fell 23p/litre over 9 weeks (mid-Oct to mid-Dec 2022) but pump prices fell only 18p/litre. Diesel wholesale costs fell 32p/litre over 8 weeks, while pump prices fell only 20p/litre. Average retailer margin on petrol rose from 8.7p (2021) to 13.5p (2022); diesel margin rose from 8.8p to 10.3p.

Source: RAC, 28 January 2023

CMA road fuel market study — final report, 2023

The CMA found evidence of a rocket-and-feather pattern specifically for diesel during 2022, with no equivalent evidence for diesel before that year. Treat this as diesel-specific evidence from a defined period, not a permanent or universal feature of the market.

Source: CMA road fuel market study, final report, 3 July 2023 (secondary reporting cross-checked across independent outlets).

LATEST AVAILABLE

CMA Enhanced Road Fuel Monitoring — August 2026 (data to end June 2026)

The CMA's most recent monitoring report documents a similar asymmetric pattern in 2026: over May–June 2026, petrol margins “generally remain[ed] below their pre-conflict level”, while diesel margins “tended to remain above their pre-conflict level...falling to pre-conflict levels only at the end of June.” The CMA said this “suggests that retailer responses to reductions in wholesale diesel costs may have been more delayed” — attributed partly to “passive pricing strategies”, not to a deliberate change in strategy to exploit the situation.

Source: CMA Enhanced Road Fuel Monitoring report, 18 August 2026

Possible contributing reasons

Retailers bought their current stock at an earlier wholesale price, before any fall.
Inventory already purchased has to be sold through before cheaper stock arrives.
Wholesale prices themselves can move at a different pace than crude oil.
Refining margins can change independently of the crude oil price.
Distribution costs (transport, storage, terminals) don't move with crude oil at all.
Retailer operating costs (staff, rent, energy, card fees) are largely fixed in the short term.
The level of local competition can affect how quickly a retailer chooses to cut prices.
Fuel Duty is a fixed amount per litre, so it doesn't fall at all when wholesale costs fall.
Currency movements can offset or amplify a change in the dollar oil price.

What the evidence does — and doesn't — show.

Regulators have found clear, quantified evidence of asymmetric pricing for diesel in specific periods (2022 and again in 2026). We have not found equivalent quantified evidence that this is a permanent, universal, or deliberately engineered feature of the whole market, or that it applies equally to petrol. The CMA's own next report (due Autumn 2026) will assess pass-through timeliness in more detail.

What are forecourts making?

Competition and retail margins

The difference between the wholesale price and the retail price is not automatically the retailer's profit — it covers running costs including staff, business rates, card processing fees, and site maintenance, as well as any profit margin.

Period	All retailers	Supermarkets	Non-supermarkets
2025 average	10.7p	9.8p	11.3p
May 2026	11p	10.7p	11.3p
June 2026	11.2p	10.4p	12p

Margins are averaged across 11 retailers covering roughly 40% of UK stations and 60% of fuel sales volume, and are not split by fuel type in the source report.

Petrol — May to June 2026

Petrol pump prices fell 6ppl over May–June 2026, while crude oil costs fell 10ppl over the same period. Using a two-week lag as a proxy for the time it takes retailers to sell through purchased stock, petrol margins generally remained below their pre-conflict level — the CMA's evidence suggests petrol consumers benefited overall from the wholesale price falls.

Diesel — May to June 2026

Diesel pump prices fell 23ppl over May–June 2026, while crude oil costs fell 10ppl and refining spreads fell 11ppl over the same period. Diesel margins "tended to remain above their pre-conflict level over the same period, falling to pre-conflict levels only at the end of June" — the CMA says this "suggests that retailer responses to reductions in wholesale diesel costs may have been more delayed."

The CMA noted that "some retailers gained a competitive advantage when wholesale diesel costs fell...but did not pass on these cost reductions to drivers more quickly in an attempt to gain market share", attributing this partly to passive pricing strategies. It found no evidence that retailers actively changed strategy to exploit the conflict, but margins "continued to be at or above the historically high level observed in 2025."

A more detailed assessment of pass-through timeliness, and of local/regional price variation, is due in the CMA's Autumn 2026 report (not yet published as of 19 September 2026).

Source: CMA Enhanced Road Fuel Monitoring report, August 2026, via GOV.UK — published 18 August 2026, data to End of June 2026.

Where the CMA has investigated, we link directly to its findings.

The Competition and Markets Authority carries out ongoing monitoring of the UK road fuel market, including retailer margins and regional pricing. We link to the regulator directly and quote its own wording rather than characterising findings beyond what it has published. A more detailed assessment of local price variation is due in the CMA's next (Autumn 2026) report.

How much of the price is tax?

The tax question

Fuel Duty

52.95p per litre

VAT

20%

Pump price168.1p

−Fuel Duty53.0p

−VAT28.0p

=Remaining pre-tax amount87.2p

That remaining 87.2p is not automatically "oil company profit". It covers wholesale fuel costs, refining, distribution, and the retailer's operating costs and margin, combined — we do not have a further verified split of that remainder, so we don't pretend otherwise.

Why is fuel more expensive than it used to be?

Price vs purchasing power

Not just what the price was — what it meant relative to income at the time.

2026

Historical data

19952000200520102015202020212022202420252026

Petrol

168.14p/litre

Diesel

190.72p/litre

Fuel Duty

52.95p/litre

VAT

20%

Minimum Wage

£12.71/hour

Average Earnings

Not yet verified

Bank Rate

3.75%

CPI index

Not yet verified

Source: GOV.UK / DESNZ — Weekly road fuel prices / GOV.UK / Bank of England (see individual figures) — view source

Make it interactive

Build the Pump Price

Drag the sliders to explore a hypothetical price.

A model, not a live pricing prediction

Wholesale fuel, refining & distribution75.8p

Fuel Duty53.0p

Retailer / forecourt margin11.3p

VAT rate20.0%

Hypothetical pump price

168.1p

Pre-tax subtotal 140.1p + VAT 28.0p

This model starts from today's verified breakdown and simply recalculates the arithmetic total as you move each slider — it does not simulate how a real change in one component (e.g. crude oil) would actually flow through refining margins or wholesale prices in practice.

A litre is small. The bill isn't.

The number on the pump is only one part of the story

From the pump to the year

A small per-litre number becomes a much larger annual one — shown against real earnings figures.

Illustrative example — not a national average

Choose a commute distance to see how a small daily number becomes a much larger annual one. This uses today's verified petrol price (168.1p/litre); the mileage and vehicle economy below are assumptions you can change, not published averages.

Daily commute (round trip)

Vehicle fuel economy

UK mpg

Driving days per week

days

Per day

£3.82

Per week

£19.10

Per month

£82.79

Per year

£993.46

In terms of pay

This weekly fuel cost is approximately 2.7% of average weekly earnings (£705/week, May–July 2026 (3-month average), Great Britain), or the equivalent of 1.5 hours of work at the National Living Wage (£12.71/hour).

Sources: ONS — Average Weekly Earnings in Great Britain; GOV.UK — National Minimum Wage and National Living Wage rates. Fuel figures calculated from today's verified petrol price (Week commencing 14 September 2026).

More ways to explore

More tools

100-Mile Journey

Vehicle fuel economy

UK mpg

Year

Cost of a 100-mile journey, 2026

£19.11

11.4 litres used

Based on the average verified petrol price for 2026. Real-world consumption varies with driving style, terrain, weather, and vehicle condition.

One Hour of Work

Petrol

7.6L

At 2026's minimum wage (£12.71/hour), one hour of work bought approximately this many litres of petrol.

Diesel

6.7L

The same calculation for diesel.

Source: GOV.UK / DESNZ — Weekly road fuel prices / GOV.UK / Bank of England (see individual figures) — view source

Follow £50

Compare year:

Known — directly published rate Estimated — calculated or averaged

Wholesale fuel, refining & distribution · Oil & energy industry Estimated£22.55

Fuel duty · Government Known£15.75

VAT (20%) · Government Known£8.35

Retailer / forecourt margin · Retail Estimated£3.35

Based on a petrol price of 168.1p/litre in 2026. The exact split varies with the fuel price, wholesale costs, retailer margins, and VAT at any given time — this is not a fixed formula.

Oil Down — Pump Down?

Crude oil vs UK pump prices, over time

HISTORICAL

Two genuine primary sources, indexed so they can be compared on the same chart: UK pump prices from GOV.UK's official weekly series, and Brent crude oil spot prices from the U.S. Energy Information Administration (EIA). Each line is indexed to 100 at the start of the selected window — this shows relative change, not the actual price levels (which are in different currencies and units).

Fuel:

Window:

UK average petrol price (pence/litre, indexed)Brent crude oil price (US$/barrel, indexed)

Each line is indexed to its own starting value = 100, so series in different units (e.g. pence/litre vs US$/barrel) can be compared by % change rather than raw size.

Pump prices: GOV.UK / DESNZ — Weekly road fuel prices

Crude oil: U.S. Energy Information Administration (EIA) — Weekly Europe Brent Spot Price FOB

These prices are connected, but they are not identical and do not necessarily move at the same speed.

Fuel Duty is a fixed amount per litre and does not change with crude oil at all. VAT is charged on the whole price, including duty. Refining, distribution and retail margins can each move independently of the crude price. A chart showing two lines moving together does not, by itself, prove that one caused the other, or that they move at the same speed.

Global profit isn't UK pump profit.

And then there's the profit question