UK Fuel Duty Explained — How Much Tax Do You Pay on Petrol?

Every time you fill up in the UK, more than half the price you pay goes straight to the government. Here is exactly how fuel duty and VAT work, why they exist, and what the current rates mean for your wallet.

What Is Fuel Duty?

Fuel duty is a fixed excise tax applied to every litre of petrol, diesel and biodiesel sold in the UK. It is collected by HM Revenue & Customs (HMRC) and paid by fuel retailers, who pass it on to consumers through the pump price. Unlike VAT, fuel duty is a flat rate per litre — it does not change with the underlying price of fuel.

Current Fuel Duty Rate

As of March 2026, the fuel duty rate is 52.95 pence per litre for both petrol and diesel. This rate has been frozen since March 2011 — over 15 years — and includes a temporary 5p cut introduced in March 2022 that has been maintained in subsequent budgets.

The pre-cut rate was 57.95p per litre. Whether the 5p cut will become permanent or be reversed is a regular topic at each Budget and Autumn Statement.

How VAT Adds Up

On top of fuel duty, VAT at 20% is charged on the total pump price — including the fuel duty itself. This means you pay tax on tax. Here is a breakdown of a typical litre of unleaded petrol:

Tax (duty plus VAT) accounts for roughly 60 to 62 percent of the pump price. This proportion has been broadly stable for years, though it increases when wholesale prices fall and decreases when they rise.

A Brief History of UK Fuel Duty

Fuel duty has existed in some form since 1909. For decades, it increased annually through the "fuel duty escalator" — an automatic above-inflation rise. The escalator was scrapped in 2000 following the fuel protests, and duty was frozen in 2011. Since then, successive governments have extended the freeze, making it one of the longest tax freezes in modern UK history.

The March 2022 cut of 5p per litre was introduced in response to surging oil prices following geopolitical instability. The cut reduced the rate from 57.95p to 52.95p and has been maintained since.

How UK Fuel Duty Compares Internationally

The UK has some of the highest fuel taxes in the world. European countries like Norway, the Netherlands and Italy have similarly high rates, while the United States has dramatically lower fuel taxes — typically around 15 to 20 pence per litre equivalent. This is a major reason why petrol in the UK costs roughly double what Americans pay.

What You Can Control

You cannot change fuel duty or VAT. But you can control where you fill up. The retailer margin — the 5 to 10 pence per litre that the forecourt earns — is where all the variation between stations comes from. Use our price comparison tool to find the cheapest forecourt in your area and keep the part of the price you can control as low as possible.

For more background on UK pricing, read why fuel prices vary across the UK, or see our 15 ways to save money on fuel.