The Latest Petrol Prices and Diesel Prices in the UK

According to the RAC, the latest average UK fuel prices, as of 21 September 2023, are:

• Petrol: 152.12p per litre
• Diesel: 149.66p per litre

This means that petrol prices are currently slightly higher than diesel prices. However, the difference between the two is relatively small, at only 2.46p per litre.

It is important to note that fuel prices can vary significantly depending on where you are in the UK. For example, prices in London and other major cities are typically higher than in rural areas. Additionally, some petrol stations may charge more than others.

If you are looking for the cheapest fuel prices, it is worth using a price comparison website or app. These websites and apps allow you to compare prices from different petrol stations in your area.

Historic Look at Petrol and Diesel Prices

The prices of petrol and diesel have fluctuated a great deal over the years due to many factors (which we’ll discuss in the next section).
The following table shows how the prices have changed from year to year.

How Is Petrol and Diesel Price Determined?

The cost of a litre of petrol or diesel in the UK is influenced by a range of factors. Here's a breakdown:

1. Crude Oil Prices: This is the starting point. The price of crude oil on the global market is arguably the largest determinant. When crude oil prices rise, petrol and diesel prices often follow suit. The Organisation of the Petroleum Exporting Countries (OPEC) and other major oil-producing nations play a crucial role in determining crude oil supply, which in turn affects prices.
2. Refining Costs and Profits: After crude oil is extracted, it needs to be refined into petrol and diesel. Fluctuations in refining costs and refining margins (profits) can impact the final price.
3. Distribution and Marketing Costs and Profits: This covers the costs and profits associated with transporting the fuel to petrol stations and selling it to consumers.
4. Taxes: A significant proportion of the pump price in the UK is made up of taxes:
   • Fuel Duty: The UK government levies a fixed fuel duty on each litre of petrol and diesel sold. This is a significant contributor to the final price.
   • Value Added Tax (VAT): VAT in the UK is charged on most goods and services, including fuel. This is a percentage of the retail price, so if the retail price of fuel increases for other reasons, the amount of VAT collected will also increase.
5. Retailer Markup: Retailers (petrol stations) add their own markup to cover their operating costs and to make a profit.
6. Exchange Rates: Oil prices are typically denominated in US dollars. Therefore, the strength of the pound sterling against the dollar can influence UK fuel prices. If the pound weakens against the dollar, oil (and consequently fuel) prices in the UK can increase, even if the global price of oil remains stable.
7. Supply and Demand: Regional supply and demand imbalances can influence prices. For example, unplanned refinery outages, pipeline issues, or increased demand due to economic growth or seasonal factors can all push prices upwards.
8. Speculation: The futures market, where commodities like oil are traded, can be influenced by speculators. Based on future price expectations, their trading activities can sometimes cause price volatility.

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Related Reading: Can I Still Buy A Diesel or Petrol Car?

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It's worth noting that while these are the general components that determine the cost of a litre of petrol or diesel in the UK, short-term fluctuations can occur for a multitude of reasons, including geopolitical tensions, natural disasters, or major policy announcements.

How Can I Save Money at the Pump?

You can do several things to save money on petrol and diesel. Here are some tips:

• Drive efficiently. This includes accelerating and braking smoothly, avoiding harsh acceleration, and changing gears early. You should also avoid using air conditioning unless absolutely necessary, as this can reduce fuel efficiency.
• Keep your car well-maintained. This includes getting regular oil changes and tune-ups and checking your tyre pressure and wheel alignment. A well-maintained car will run more efficiently and use less fuel.
• Reduce weight and drag. This means removing any unnecessary items from your car, such as roof racks and bike carriers. It also means keeping your windows up when driving at high speeds.
• Use fuel loyalty cards. Many petrol stations offer loyalty cards that give you points for every litre of fuel you buy. These points can then be redeemed for discounts on fuel, groceries, and other items.
• Shop around for the best prices. Fuel prices can vary significantly from one petrol station to the next. Using a price comparison website or app is worth finding the cheapest fuel in your area.
• Try to plan your trips ahead of time and avoid driving during peak traffic hours. This will help you reduce the time you spend idling, which wastes fuel.
• Consider carpooling or using public transportation whenever possible. This can save you a significant amount of money on fuel, especially if you have a long commute.
• If you are considering buying a new car, look for one with good fuel efficiency. The UK government has a website that allows you to compare the fuel efficiency of different cars.

By following these tips, you can save a significant amount of money on petrol and diesel in the UK.

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Related Reading: Is My Car Fuel Efficient? Most Fuel-Efficient Cars in the UK

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Need Gap Insurance?

There are a few different types of policy you can choose from when taking out your Gap Insurance cover with Click4Gap. These depend largely on how you intend to fund the purchase of your vehicle. So what car Gap Insurance is right for you?

Combined Return to Invoice Gap Insurance

If you paid cash for your vehicle, or paid a sizeable deposit, or if you financed it, Combined RTI Gap cover will pay out the shortfall between the cost of your vehicle and the market value at the point of claim, which is the amount your motor insurer will cover. This is cover that will protect you no matter if you use your vehicle for private use or for business.

Lease/Contract Hire Gap Insurance

If you leased your vehicle or it is under a contract hire agreement, Lease/Contract Hire Gap Insurance will cover you for the shortfall on your lease agreement, after your motor insurer settlement. If, for any reason, you change your vehicle within the first 90 days from the start date, we will also arrange to transfer your cover to your new vehicle without hassle or charge.

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Related Reading: The Consequences of NOT Having Click4Gap Gap Insurance