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

Q9) What is the proportion of the pump price that is tax in each EU country?

Q10) How is the price of crude oil set?

Q11) What is the current price of a barrel of Brent crude oil?

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

Q13) Why is diesel more expensive than petrol?

Q14) What was announced in Autumn Budget 2017?

Q15) How much do motorists pay in direct motoring taxes and other taxes?

Q16) How much is spent on roads?

Q17) Has spending by local highway authorities on English local roads fallen in recent years?

Q18) Since 1979, how much has been raised per year in Fuel Duty and Vehicle Excise Duty and how much has been spent on roads in each corresponding year?

Q19) Is the amount of revenue raised by Vehicle Excise Duty and Fuel Duty likely to decline in future?

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

Q21) What percentage of motoring taxes do the various vehicle classes pay?

Q22) How much do the different users of transport modes contribute to, or cost, the Treasury?

Q23) How have motoring costs changed over a 10 year rolling period?

Q24) What proportion of household spending is spent on motoring?

Q25) How many families live in transport poverty?

Q26) How does the cost of motoring compare to the cost of rail and bus fares over a 10 year rolling period?

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

Q28) Which English local authority has the largest income from parking activities?

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

Q30) Which Scottish local authority has the largest income from parking activities?

Q31) Do local authorities in Wales make a surplus on their parking activities?

Q32) Which Welsh local authority has the largest income from parking activities?

Q33) Can local authorities use their powers to charge local residents for parking in order to raise surplus revenue for other transport purposes?

Q34) What proportion of local authorities' on-street parking income comes from parking fees and permits and from penalties?



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. The table also includes an assessment of where fuel prices are expected to go over the next couple of weeks

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 March 2018, the average price of a litre of premium unleaded petrol was 119.11p.

The price per litre, excluding VAT, was 99.26p and the price, excluding both VAT and Fuel Duty, was 41.31p.

The average price of a litre of diesel petrol was 122.96. The price per litre, excluding VAT, was 102.46p and the price, excluding both VAT and Fuel Duty, was 44.51p.

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

A8) 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 in the top two of most expensive countries in the EU 28.

Source: www.energy.eu

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Q9) What is the proportion of the pump price that is tax in each EU country?

A9) 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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Q10) How is the price of crude oil set?

A10) 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. Its members own 73% of the world’s proven oil reserves and in 2016 produced 44% of the world’s total supply of crude oil. The 14 member 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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Q11) What is the current price of a barrel of Brent crude oil?

A11) 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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Q12) What is the record price of a barrel of Brent crude oil?

A12) On 11 July 2008, a barrel of Brent crude oil hit an all-time high of 148 US dollars.

Source: Financial Times

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Q13) Why is diesel more expensive than petrol?

A13) 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.

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Q14) What was announced in Autumn Budget 2017?

A14) In Autumn Budget 2017, the Chancellor announced:-

  • Fuel duty will be frozen in 2018-19.
  • A review into whether the existing fuel duty rates for alternatives to petrol and diesel are appropriate, ahead of decisions at Budget 2018.
  • £220 million for a new Clean Air Fund paid for by a) a Vehicle Excise Duty (VED) supplement that will apply to new diesel cars first registered from 1 April 2018, so that their First-Year Rate will be calculated as if they were in the VED band above. This will not apply to next-generation clean diesel; and b) a rise in the existing Company Car Tax diesel supplement from 3 per cent to 4 per cent, with effect from 6 April 2018. This will also not apply to next-generation clean diesel.
  • The UK will set out rules so that self-driving cars can be tested without a safety operator.
  • An increase in VED in line with RPI from 1 April 2018 VED rates for cars, vans and motorcycles registered before April 2017 and the First-Year Rates for cars registered after April 2017
  • Company cars – The Fuel Benefit Charge and the Van Benefit Charge will both increase by RPI.

Full details can be viewed in Autumn Budget 2017.

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Q15) How much do motorists pay in direct motoring taxes and other taxes?

A15) The taxes that are most directly linked to motoring are Vehicle Excise Duty (VED) and Fuel Duty. Latest figures show that VED generated around £6bn in 2016, up 1.5 per cent from 2015, and Fuel Duty about £28 billion. Fuel Duty revenue more than tripled between 1987 and 2010, then flattened at around £27bn before rising 2.1 per cent to £28bn in 2016.

Source: Transport Statistics Great Britain 2017 and DfT Table TSGB1310

In addition to specific road user taxes, some transport expenditure is liable to VAT. In 2012, for private households, a total of £12.2 billion in VAT was raised through motorists buying, running and using their vehicles. (VAT on vehicle purchases raised £3.84 billion; VAT on fuel raised £5.64 billion; and £2.72 billion of VAT was also raised through road users buying other motoring-related goods and services).

Motorists are also taxed for the use of company cars as a benefit in kind. The Road Users’ Alliance estimated the proceeds of this tax to have been £3.7 billion in 2011/12. Motorists also pay an insurance premium tax when they insure their vehicle and it is estimated in 2012 vehicle insurance premium tax costs road users about £560 million a year.

Motorists also pay for driving tests, MOT vehicle tests, and parking and other fees and fines. As these are associated with either a service or penalty, they are not treated as taxes in the analysis undertaken by the RAC Foundation.

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

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Q16) How much is spent on roads?

A16) Latest figures show that in 2016/17, £9.7 billion was spent on roads in the United Kingdom.

Source: Transport Statistics Great Britain 2017 and DfT Table TSGB1303

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Q17) Has spending by local highway authorities on English local roads fallen in recent years?

A17) Yes. Capital spending on local roads maintenance has been £1.8bn/year over the last two years – the lowest level since 2001/02 whilst local highways authority maintenance spending reduced by 15 per cent between 2009/10 and 2013/14. A further 35 per cent reduction in local highways maintenance budgets is estimated by the end of the decade.

Source: The Condition of England’s Local Roads and how they are Funded

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Q18) Since 1979, how much has been raised per year in Fuel Duty and Vehicle Excise Duty and how much has been spent on roads in each corresponding year?

A18) The amount raised in Fuel Duty and Vehicle Excise Duty each year from 1979, and the expenditure on roads in each corresponding year, can be viewed here.

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Q19) Is the amount of revenue raised by Vehicle Excise Duty and Fuel Duty likely to decline in future?

A19) 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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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) What percentage of motoring taxes do the various vehicle classes pay?

A21) In 2012/13,cars were responsible for 63.9 per cent of motoring taxes; HGVs 18.0 per cent; LGVs 13.8 per cent; buses and coaches 3.5 per cent; motorcycles, scooters and mopeds 0.6 per cent; and other vehicles 0.2 per cent.

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

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Q22) How much do the different users of transport modes contribute to, or cost, the Treasury?

A22) Drivers contribute 3.8p in tax to the Chancellor’s coffers for every kilometre they travel.

By contrast, passengers on local bus services cost the Treasury in subsidies 6.5p for every kilometre they travel; national rail passengers 8.5p per kilometre; and London Underground passengers 9.7p per kiilometre.

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

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Q23) How have motoring costs changed over a 10 year rolling period?

A23) 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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Q24) What proportion of household spending is spent on motoring?

A24) In 2016/17, the average weekly household expenditure was £554.20. Households spent an average of £79.70 a week on transport, an increase of £5.40 in real terms when compared with the previous year; this makes transport the top spending category.

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, £32.30 of household expenditure per week was spent on the operation of personal transport. This included £20.70 on petrol, diesel and other motoring oils and £6.10 per week on repairs and servicing.

Households also spent on average £29.20 per week on the purchase of vehicles. This included £18.00 per week spent on buying second hand cars and vans and £10.50 per week spent on buying new cars and vans.

On average £18.20 per week was spent by households on other transport services, such as rail fares and air fares. This was lower than on either buying or fuelling vehicles. Spending on international air fares (£6.60 per week) was the highest, followed by rail and tube fares (£3.80 per week).

Source: Office for National Statistics: Family spending in the UK: financial year ending 2017

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Q25) How many families live in transport poverty?

A25) Official data analysed by the RAC Foundation suggests that just over a million car-owning households in the lowest of the ONS’s ten income brackets (the poorest 10%) spent about a quarter of their maximum weekly spend on buying and running a vehicle in the last financial year.

These households had a maximum weekly spend of £205 in 2016/17 and of this figure, £58.20 per week was spent on motoring. The £58.20 compares with £42.50 spent weekly in the previous financial year, 2015-16.

Source: RAC Foundation

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Q26) How does the cost of motoring compare to the cost of rail and bus fares over a 10 year rolling period?

A26) 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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Q27) Do local authorities in England make a surplus on their parking activities?

A27) Figures analysed by the RAC Foundation show that in 2016-17, English councils generated a combined “profit” of £819 million from their day to day, on and off street parking operations. This is another record surplus and is 10 per cent higher than the 2015-16 figure of £744 million. The overall rise in profits is due to increasing income (6 per cent up on the previous financial year) as compared to costs increasing by 2 per cent up on the previous financial year.

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 Department for Communities and Local Government.

Although not all councils made a large surplus, very few lose money on their parking activities. Just 46 (13 per cent) of the 353 parking authorities in England reported negative numbers.

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Q28) Which English local authority has the largest income from parking activities?

A28) The authority with the largest surplus in 2016-17 was Westminster with a “profit” of £73.2 million. The four biggest earners were all London authorities with only Brighton breaking into a top ten dominated by councils in the capital.

A table detailing the parking operations surpluses for all English councils in 2016-17 can be seen here.

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

A29) Figures analysed by the RAC Foundation show that between them, local authorities in Scotland made an annual net surplus of £40.3 million from their parking activities in 2015-16.

This figure is 12 per cent higher than the previous financial year when the surplus was £36.1 million.

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Q30) Which Scottish local authority has the largest income from parking activities?

A30) The biggest “profits” were made in Edinburgh (£19.4 million). This was followed by Glasgow (£12.6 million) and Aberdeen (£4.9 million).

Between them these three local authorities generated 91 per cent of the total net surplus in Scotland.

A table detailing the parking operations surpluses for all Scottish councils in 2015-16 can be seen here.

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Q31) Do local authorities in Wales make a surplus on their parking activities?

A31) Figures analysed by the RAC Foundation show that between them, local authorities in Wales made an annual net surplus of £14 million from their parking activities in 2016/17.

The figure for 2016-17 was 1.4 per cent higher than the £13.8 million surplus made in 2015-16

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Q32) Which Welsh local authority has the largest income from parking activities?

A32) The biggest “profits” were made in Cardiff (£3.65 million) followed by Swansea (£2.46 million) and Gwynedd (£1.35 million).

A table detailing the parking operations surpluses for all Welsh councils in 2016-17 can be seen here.

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Q33) Can local authorities use their powers to charge local residents for parking in order to raise surplus revenue for other transport purposes?

A33) 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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Q34) What proportion of local authorities' on-street parking income comes from parking fees and permits and from penalties?

A34) In London, about half of councils’ on-street parking income comes from parking fees and permits and half from penalties.

Outside the Capital, the ratio is 55:45.

Source: Spaced Out: Perspectives on Parking Policy

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