How Much Fuel Duty Do You Pay in the UK?
When you fill up at the pump and pay 156p per litre for petrol, where does that money actually go? The answer might surprise you — the UK government takes more than half of every pound you spend on fuel, making British petrol prices among the most tax-heavy in the world.
Where your 156p per litre goes — May 2026
Based on UK average petrol price of 156.8p/litre, May 2026. Wholesale and retail margins are approximate.
Tax makes up around 51% of the pump price. Of every £1 you spend on petrol, approximately 51p goes directly to the Treasury in fuel duty and VAT.
What is fuel duty?
Fuel duty is a flat tax charged per litre of petrol or diesel sold in the UK. It's the same regardless of the price of oil — so when crude oil prices fall, fuel duty doesn't. The current rate is 52.95p per litre for both petrol and diesel.
Fuel duty is one of the UK government's biggest revenue streams, raising around £24-26 billion per year. It's also one of the most politically sensitive taxes — any cut generates significant public interest, while any rise generates significant opposition.
VAT on petrol — the tax on a tax
VAT at 20% is charged on the full pump price — including the fuel duty. This means you're effectively paying VAT on top of the duty, which critics call a "tax on a tax." On a 156p/litre tank, VAT adds approximately 26p per litre.
The fuel duty freeze — what's happened since 2011
Fuel duty has been frozen at 52.95p per litre since 2011 — over 14 years. In March 2022, it was cut by 5p to 52.95p in response to surging oil prices following Russia's invasion of Ukraine. That cut was extended through successive budgets and remains in place.
In real terms (adjusted for inflation), fuel duty is significantly lower than it was in 2010. The freeze has been politically popular but has cost the Treasury tens of billions in foregone revenue, contributing to pressure on public finances.
Future fuel duty changes: As EV adoption increases, fuel duty revenues will fall. The government has acknowledged this and is consulting on road pricing as a potential replacement. Watch for Budget announcements on fuel duty — any change has an immediate and significant effect on pump prices.
Why UK petrol is expensive compared to other countries
| Country | Pump price (equiv. pence/litre) | Tax as % of price |
|---|---|---|
| 🇸🇦 Saudi Arabia | ~17p | ~5% |
| 🇺🇸 United States | ~66p | ~15% |
| 🇦🇺 Australia | ~97p | ~35% |
| 🇩🇪 Germany | ~149p | ~48% |
| 🇫🇷 France | ~151p | ~50% |
| 🇬🇧 United Kingdom | 156.8p | ~51% |
| 🇳🇱 Netherlands | ~166p | ~55% |
| 🇮🇹 Italy | ~155p | ~55% |
The UK's high fuel prices are primarily a function of high taxation rather than high underlying oil costs — the wholesale cost of petrol is similar across developed nations. Countries like the US and Australia tax fuel far less, which is why their pump prices are significantly lower despite using the same global oil market.
How much fuel duty do you pay per year?
For a typical driver covering 12,000 miles per year in a 40 MPG petrol car:
- Fuel used: ~136 litres per month / ~1,636 litres per year
- Fuel duty paid: 1,636 × 52.95p = ~£866 per year
- VAT on fuel: ~£430 per year
- Total tax on fuel: ~£1,296 per year
That's a significant sum — and it's why fuel efficiency matters so much. Every MPG improvement directly reduces the tax you pay as well as the underlying fuel cost.
Calculate your exact fuel cost and tax — free