Economics

Q1) What is the current price of petrol and diesel?

Q2) What are the record high prices for the cost of petrol and diesel?

Q3) How does the wholesale (at the refinery gate) price of petrol and diesel compare with the retail (pump) price?

Q4) What are the elements that make up the price of a litre of petrol or diesel?

Q5) What is the current price of petrol and diesel excluding VAT and Fuel Duty?

Q6) What is the percentage of the fuel price that has been taxation over the last 10 years?

Q7) What is the current and historical rate of Fuel Duty?

Q8) What is the cost of filling up an average car?

Q9) Does the UK have the most expensive petrol prices in Europe?

Q10) What is the proportion of the pump price that is tax in each EU country?

Q11) How is the price of crude oil set?

Q12) What is the current price of a barrel of Brent crude oil?

Q13) What is the record price of a barrel of Brent crude oil?

Q14) Why is diesel more expensive than petrol?

Q15) What was announced in Budget 2020?

Q16) How much do motorists pay in direct motoring taxes and other taxes?

Q17) How much is spent on roads?

Q18) Is the amount of revenue raised by Vehicle Excise Duty and Fuel Duty likely to decline in future?

Q19) Are there any plans to overhaul VED to encourage the greater take up of green vehicles?

Q20) Could there be a change in the way motorists are charged for using the roads?

Q21) How have motoring costs changed over a 10 year rolling period?

Q22) What proportion of household spending is spent on transport?

Q23) How many families live in transport poverty?

Q24) How does the cost of motoring compare to the cost of rail and bus fares over a 10 year rolling period?

Q25) Do local authorities in England make a surplus on their parking activities?

Q26) Which English local authority has the largest surplus from parking activities?

Q27) Do local authorities in Scotland make a surplus on their parking activities?

Q28) Which Scottish local authority has the largest surplus from parking activities?

Q29) Do local authorities in Wales make a surplus on their parking activities?

Q30) Which Welsh local authority has the largest surplus from parking activities?

Q31) Can local authorities use their powers to charge local residents for parking in order to raise surplus revenue for other transport purposes?

Q32) What proportion of local authorities' parking income in England comes from on-street and off street parking activities?



Q1) What is the current price of petrol and diesel?

A1) The very latest fuel price is available in the interactive data section of our website.

Here you can also find weekly prices plotted over the past ten years.

For further historic prices click here (Department for Business, Energy & Industrial Strategy data).

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Q2) What are the record high prices for the cost of petrol and diesel?

A2) Unleaded petrol hit a record high of 142.17p/litre on 16 April 2012. Diesel hit a record high of 148.04p/litre on the same day.

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Q3) How does the wholesale (at the refinery gate) price of petrol and diesel compare with the retail (pump) price?

A3) A chart showing both the wholesale (at the refinery gate) price of petrol and diesel and the retail (pump) price can be viewed here.

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Q4) What are the elements that make up the price of a litre of petrol or diesel?

A4) There are a number of elements that make up the price of a litre of petrol or diesel. These primarily consist of:-

  • Government duty and tax
  • the cost of petrol and diesel on the open market
  • the costs and profit of the wholesaler and retailer. (This is often referred to as the retail/ex-refinery spread). This covers the costs of transport to a storage terminal/depot, storage and distribution to a filling station; marketing and promotion costs; and the costs of operating the filling station and staff.

The United Kingdom Petroleum Industry Association (UKPIA) has produced an information leaflet on this matter. This can be viewed here.

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Q5) What is the current price of petrol and diesel excluding VAT and Fuel Duty?

A5) Figures supplied by the Department for Business, Energy & Industrial Strategy show that in June 2020, the average price of a litre of premium unleaded petrol was 106.37p.

The price per litre, excluding VAT, was 88.65p and the price, excluding both VAT and Fuel Duty, was 30.70p.

The average price of a litre of diesel petrol was 112.53p. The price per litre, excluding VAT, was 93.78p and the price, excluding both VAT and Fuel Duty, was 35.83p.

The percentage of the pump price that is Fuel Duty and VAT can be viewed here.

For further historic prices click here (BEIS data).

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Q6) What is the percentage of the fuel price that has been taxation over the last 10 years?

A6) This chart plots the percentage of the fuel price that has been taxation over a 10 year rolling period.

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Q7) What is the current and historical rate of Fuel Duty?

A7) The current Fuel Duty rate is 57.95 pence per litre.

Historical rates since 2001 are shown below.

Unleaded and Diesel
Duty rate per litre from 7 March 2001 45.82p
Duty rate per litre from 1 October 2003 47.10p
Duty rate per litre from 7 December 2006 48.35p
Duty rate per litre from 1 October 2007 50.35p
Duty rate per litre from 1 December 2008 52.35p
Duty rate per litre from 1 April 2009 54.19p
Duty rate per litre from 1 September 2009 56.19p
Duty rate per litre from 1 April 2010 57.19p
Duty rate per litre from 1 October 2010 58.19p
Duty rate per litre from 1 January 2011 58.95p
Duty rate per litre from 23 March 2011 57.95p

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Q8) What is the cost of filling up an average car?

A8) A chart tracking the cost back to May 2012 based on a Ford Focus with 55 litre tank can be viewed here.

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Q9) Does the UK have the most expensive petrol prices in Europe?

A9) Contrary to popular myth, the UK does not have the most expensive petrol prices in Europe. Click here to see where we rank.

However, the position is different when it comes to diesel where we are routinely one of the most expensive countries in the European Union. Click here to see where we rank.

Source: www.energy.eu

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Q10) What is the proportion of the pump price that is tax in each EU country?

A10) This chart plots the pre-tax cost of unleaded petrol in each of the 28 EU member countries against the proportion of tax in the final pump price.

This chart plots the pre-tax cost of diesel against the proportion of tax in the final pump price.

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Q11) How is the price of crude oil set?

A11) The price of crude oil is driven by a number of factors. These include:-

  • Production capacity – Global supply of crude oil has grown more slowly than demand in the last decade. This is the result of a variety of factors including slowing production capacity of non-OPEC countries due to depleting oil fields (North Sea Continental Shelf for example) and interruptions to supply as a result of geopolitical tensions, such as the Arab Spring.

  • Organization of the Petroleum Exporting Countries (OPEC) – Founded in 1960, OPEC is an intergovernmental organisation that has the objective of safeguarding the interests of oil producing countries around the world. According to current estimates, 79.4 per cent of the world’s proven oil reserves are located in OPEC Member Countries and in 2018 it  produced  about 42 per cent of the world’s total supply of crude oil. There are currently 13 member countries and these countries meet at least twice a year to discuss oil market fundamentals and set a crude production ceiling for the following price revision period. OPEC therefore has the potential to influence on international crude oil prices by increasing or decreasing its oil production capacity.

  • Inventories – Inventories can influence and also reflect the market perception of short-term demand/supply and therefore can have an impact on future oil prices. Crude and petroleum product inventories serve to balance the impact of potential supply disruptions in the short term. Where inventories are low, markets can be more sensitive to actual or perceived supply disruptions or demand fluctuations.

  • Crude oil reserves – The extent of proven reserves relative to demand can have an impact on the market’s perception of the long-term balance of demand and supply and therefore can affect future prices.

  • US dollar exchange rates – All crude is traded in the US dollar and therefore the strength of the currency has an impact on oil prices. A weaker US dollar leads to lower oil prices in non-dollar denominated countries. This can increase demand, which in turn may push up oil prices.

  • Other factors – Oil exploration and production costs can have an impact on supply of crude oil as can investment in production capacity and weather conditions. In addition, market sentiment itself can have an impact on prices.

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Q12) What is the current price of a barrel of Brent crude oil?

A12) The very latest oil price is available in the interactive data section of our website.

Here you can also find the price of Brent crude over the past 12 months both in US dollars and pound sterling

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Q13) What is the record price of a barrel of Brent crude oil?

A13) On 11 July 2008, a barrel of Brent crude oil hit an all-time high of 148 US dollars.

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Q14) Why is diesel more expensive than petrol?

A14) Historically, demand for diesel has been growing in the UK and Europe, as well as globally. This has led to diesel supply in the UK becoming tighter in recent years and this has been reflected in wholesale prices and pump prices that are often higher than petrol prices.

There are a number of factors that influence prices. These broadly fall into the category of market or structural influences. Market factors include:-

  • increased crude oil prices, with particular demand for “sweeter” lower sulphur crudes like those from the North Sea
  • increased global demand for transport fuels, particularly diesel
  • seasonal winter demand for heating gas oil which is similar to diesel and made from the same basic refinery components
  • summer export of petrol to the USA
  • short-term market factors relecting fuel specification changes, extreme cold weather or temporary supply problems

Structural influences include:-

  • a growing imbalance in the UK and in most other EU countries between petrol and diesel production and demand
  • fuel specification changes

The United Kingdom Petroleum Industry Association (UKPIA) has produced an information leaflet on this matter. This can be viewed here.

The issue is also explored in the House of Commons Library Briefing Paper 4712.

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Q15) What was announced in Budget 2020?

A15) In Budget 2020, the Chancellor announced:-

  • Fuel duty will be frozen in 2020/21. Future fuel duty rates will be considered alongside measures that are needed to help meet the UK’s net zero commitment.
  • A call for evidence on VED which will include how VED can be used to support the take-up of zero and ultra-low emission vehicles and reduce overall emissions from road vehicles.
  • Confirmation that Road Investment Strategy 2 would proceed with funding of £27 billion between now and 2025.
  • The removal of the entitlement to use red diesel from April 2022, except in agriculture, fish farming, rail and for non-commercial heating (including domestic heating).
  • Further consumer incentives to support the development of markets for new transport technology. The government is considering the long-term future of incentives for zero emission vehicles alongside the 2040 phase-out date consultation for diesel and petrol cars. Until then, the government will provide £403 million for the Plug-in Car Grant, extending it to 2022-23. Plug-in Grants for vans, taxis and motorcycles will also be extended to 2022‑23
  • A Potholes fund of £500 million per year from 2020-21 to 2024-25 to help tackle potholes and to stop them from forming.

Full details contained in Budget 2020 can be viewed here.

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Q16) How much do motorists pay in direct motoring taxes and other taxes?

A16) The taxes that are most directly linked to motoring are Vehicle Excise Duty (VED) and Fuel Duty. Latest figures show that in 2018/9, VED generated around £6.7 billion, up 6 per cent from the previous financial year, and Fuel Duty about £28 billion.

Fuel Duty revenue more than tripled between 1987 and 2010. It has since remained around the £27/28 billion level.

These two direct motoring taxes produce approximately 5 per cent of all taxes and duties collected in the UK.

Source: DfT Table TSGB1310

Motoring taxes apart, the public road system is generally free to use, with a few exceptions. In London and Durham, congestion charges are levied – and in 2018/19 these raised approximately £230 million, almost entirely from the London charge. In Nottingham, a Workplace Parking Levy raised £10 million in 2018/19. Tolls were payable on 19 sections of British roads in 2018/19, of which all, bar one, were river crossings. The number of toll roads has reduced significantly in recent years, so that there are now no longer any in Scotland, Wales or Northern Ireland. The annual receipts from these tolled facilities is about £370 million.

In addition to specific road user taxes, some transport expenditure is liable to VAT. For private households, expenditure on purchasing and running motor vehicles in Great Britain amounted to about £84 billion in 2018/19, including VAT. With households spending £34.3 billion on vehicle purchases, the VAT paid would amount to £5.7 billion. The proceeds of VAT on fuel duty (i.e. an enhancement of a direct motoring tax) paid by all road users amounted to £5.4 billion in 2018/19 having grown by 13 per cent in real terms since 2008/9; this increase was the result of the increase in the VAT from 17.5 per cent to 20 per cent. In addition to purchasing vehicles and fuel, road users also buy other motoring-related goods and services worth £16.5 billion a year, adding £2.7 billion to make up the total of £12 billion VAT derived from motorists buying, running and using their vehicles.

VAT is not paid on insurance premiums, as there is a separate Insurance Premium Tax (IPT). The standard rate of IPT has been progressively increased from 5 per cent in 2010 to 12 per cent from June 2017. Motor insurance premiums generated almost £1.2 billion in 2018/19 – double the amount raised in 2009/10. The sharp increase from 2015/16 was caused mainly by the increases in the rate of IPT, and the levelling off in 2018/19 was a consequence of the stabilisation of the IPT rate in June 2017.

Source: Public Expenditure, Taxes and Subsidies: Land Transport in Great Britain – April 2020

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Q17) How much is spent on roads?

A17) Latest figures show that in 2018/19, about £10.2 billion was spent on national and local roads in the United Kingdom.

Since 1936 motoring taxes have not been earmarked for roads funding, although this has recently been altered and, from 2020/21, all revenue raised from Vehicle Excise Duty in England will be allocated to a new National Roads Fund and invested directly back into the major road network.

Source: DfT Table TSGB1303

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Q18) Is the amount of revenue raised by Vehicle Excise Duty and Fuel Duty likely to decline in future?

A18) Yes. There is a forecast collapse in income from motoring taxation caused by increasingly fuel efficient petrol and diesel cars and the predicted large-scale take-up of electric vehicles.

Projections show the amount of Fuel Duty revenue currently stands at 1.7 per cent of GDP but will tumble to 1.1 per cent by 2029. Over the same period, VED revenue will fall by 0.3 per cent to 0.1 per cent. The total decline in motoring taxes is equivalent to £13.2bn a year in today’s terms (from £38bn in 2010 to £25bn in 2029).

This forecast is part of detailed analysis of motoring taxation commissioned by the RAC Foundation from the Institute of Fiscal Studies (IFS). The conclusions of the IFS are contained in a report called Fuel for Thought.

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Q19) Are there any plans to overhaul VED to encourage the greater take up of green vehicles?

A19) Possibly. The Government has called for evidence  on whether the VED system should be overhauled to encourage the greater take up of green vehicles.

Currently, cars are put into bands depending what their CO2 emissions are, and the higher the emissions level the higher the cost of the first year VED rate. In subsequent years most cars then go on to pay a single standard rate. However, ministers are worried that the system is not doing enough to encourage people to go green.

Full details can be viewed here.

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Q20) Could there be a change in the way motorists are charged for using the roads?

A20) The projected fall in income from VED and Fuel Duty could lead to a change in which motorists are charged for using the roads. One possibility was outlined in the Miles Better report which won The 2017 Wolfson Economics Prize. This report was contributed to by the RAC Foundation.

Under this proposal both Fuel Duty and VED would be abolished. Instead there would be a single per-mile charge, the rate of which would depend on a vehicle’s weight (hence taking into account the damage it does to the road) and its tailpipe emissions. The lighter and cleaner a vehicle is, the lower the per mile charge. The heavier and dirtier the vehicle is, the higher the per mile charge.

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Q21) How have motoring costs changed over a 10 year rolling period?

A21) The data chart that can be viewed here plots the percentage change in the price of various aspects of motoring over a rolling ten year period. The RPI cost of living index is also plotted over the same period.

The chart shows that over time, operational costs have generally risen significantly above the rate of inflation. However, the cost of buying a vehicle has not increased as much as inflation.

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Q22) What proportion of household spending is spent on transport?

A22) In 2018/19, the average weekly household expenditure was £585.60. Spending on transport (including the purchase and servicing of vehicles, fuel and public transport) was the category with the highest average weekly spend of £80.20, equivalent to 13.7 per cent of households’ average total weekly household expenditure.

Different households have different transport requirements, with some relying on public transport and others more on cars. Not all households buy a vehicle in any given year, but it is a major expense for those that do. The transport expenditure figures are presented averaged across all households, whether they spent on a particular item or not.

On average, £35.00 of household expenditure per week was spent on the operation of personal transport. This included £23.20 per week on the purchase of petrol, diesel and other motor oils and £6.80 per week on repairs and servicing. Households also spent £2.80 per week on other motoring costs eg parking fees, motoring organisation subscriptions and £2.20 per week on spares and accessories.

Households also spent on average £24.00 per week on the purchase of vehicles. This included £14.70 per week spent on buying second hand cars and vans and £8.70 per week spent on buying new cars and vans.

On average £21.70 per week was spent by households on other transport services, such as rail fares and air fares. Spending on international air fares (£6.90 per week) was the highest, followed by rail and tube fares and car leasing (both £4.60 per week).

Source: Office for National Statistics: Family spending in the UK: April 2018 to March 2019

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Q23) How many families live in transport poverty?

A23) RAC Foundation analysis of data requested from the ONS suggests that around a million car-owning households in the lowest of the ONS’s ten income brackets (the poorest 10 per cent) spent an average of £57.10 per week on purchasing and operating a car or van in 2018-19. This amounts to just over a quarter (26 per cent) of the maximum weekly spend of £218 for households in this group over the year.

The poorest households in the UK saw spending on buying and running a car rise in 2018-19. The £57.10 weekly spend is 17 per cent higher than the £48.90 spent in the previous financial year, 2017-18. This increased spending was due to the increased costs of purchasing a vehicle, fuel, insurance and repairs and servicing.

Source: RAC Foundation

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Q24) How does the cost of motoring compare to the cost of rail and bus fares over a 10 year rolling period?

A24) The data chart that can be viewed here plots over a rolling ten year period the percentage change in the cost of motoring and the cost of rail and bus fares. The RPI cost of living index is also plotted over the same period.

While motoring costs seem to have fallen in real terms, this disguises the fact that the (often discretionary) cost of buying a new or second hand vehicle has been falling whilst (non-discretionary) operating costs such as fuel and insurance have risen significantly quicker than inflation.

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Q25) Do local authorities in England make a surplus on their parking activities?

A25) Figures analysed by the RAC Foundation show that in 2018-19, English councils generated a combined “profit” of £930 million from their day to day, on and off street parking operations.

This is another record surplus and is 7 per cent higher than the 2017-18 figure of £867 million.

The figures are calculated by adding up income from parking charges and penalty notices, then deducting running costs. The data comes from the statutory annual returns that councils make to the Ministry of Housing, Communities and Local Government.

Although not all councils made a large surplus, very few lost money on their parking activities. Just 41 of the 353 councils in England who returned parking figures to central Government reported a loss on their parking activities.

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Q26) Which English local authority has the largest surplus from parking activities?

A26) The authority with the largest surplus in 2018-19 was Westminster with a “profit” of £69.2 million. As in previous years, the largest profits were made by London councils with only Brighton breaking into a top thirteen dominated by councils in the capital.

A table detailing the parking operations surpluses for all English councils in 2018-19 can be seen here.

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Q27) Do local authorities in Scotland make a surplus on their parking activities?

A27) Figures analysed by the RAC Foundation show that between them, local authorities in Scotland made a net surplus of £44.6 million from their parking activities in 2017-18.

This figure is 5 per cent higher than the previous financial year when the surplus was £42.6 million.

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Q28) Which Scottish local authority has the largest surplus from parking activities?

A28) The biggest “profits” were made in Edinburgh (£23.8 million). This was followed by Glasgow (£12.5 million) and Aberdeen (£3.3 million).

Between them these three local authorities generated 89 per cent of the total net surplus in Scotland.

A table detailing the parking operations surpluses for all Scottish councils in 2017-18 can be seen here.

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Q29) Do local authorities in Wales make a surplus on their parking activities?

A29) Figures analysed by the RAC Foundation show that between them, local authorities in Wales made a  net surplus of £14.4 million from their parking activities in 2017/18.

The figure for 2017-18 was 3 per cent higher than the £14 million made in 2016-17.

The rise was the fifth consecutive annual increase.

Only three councils reported losses on their parking activities.

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Q30) Which Welsh local authority has the largest surplus from parking activities?

A30) The biggest ‘profit’ was made by Cardiff (£3.87 million). This was followed by Swansea (£2.85 million) and then Gwynedd (£1.38 million).

A table detailing the parking operations surpluses for all Welsh councils in 2017-18 can be seen here.

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Q31) Can local authorities use their powers to charge local residents for parking in order to raise surplus revenue for other transport purposes?

A31) No. In a ruling at the High Court in London, Mrs Justice Lang said the 1984 Road Traffic Regulation Act “is not a fiscal measure and does not authorise the authority to use its powers to charge local residents for parking in order to raise surplus revenue for other transport purposes”.

On-street parking fees and penalty charges can only be set with the intention of “relieving or preventing congestion of traffic” and covering the cost of administering the schemes. Strict rules state that any surplus, with only minor exceptions, must be spent on contributing to the cost of off-street parking, public transport, road improvements and environmental improvements.“ But councils should not set out to raise money for these or any other purpose.

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Q32) What proportion of local authorities' parking income in England comes from on-street and off street parking activities?

A32) About 58 per cent of local authorities’ parking income in England comes from on-street activities (fees, permits and penalties) and about 42 per cent from off-street activities.

About 55 per cent of councils’ on-street parking income comes from parking fees and permits and about 45 per cent from penalties.

Source: RAC Foundation

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