Price Breakdown
See exactly where your money goes when you fill up. Tax, duty, crude oil, refining, and more.
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Cost per litre
Where your money goes
What makes up the price
Fuel Duty
53pFixed tax of 52.95p per litre paid to HMRC
VAT (20%)
24.8p20% Value Added Tax on the total price including duty
Crude Oil
44.2pCost of raw crude oil on international markets
Refining
8.5pCost of refining crude oil into petrol or diesel
Biofuel & Green Obligations
5.7pRTFO, greenhouse gas reduction, development fuel obligations
Delivery & Distribution
5.7pTransport from refinery to depot to forecourt
Retailer Margin
7.1pForecourt operating costs and profit (typically 3-8p)
Fuel Duty Rate Changes
| Date | Rate | Change |
|---|---|---|
| Until 31 Aug 2026Current | 52.95p | Current rate (temporary 5p cut from 57.95p) |
| 1 Sep 2026 | 53.95p | +1p increase |
| 1 Dec 2026 | 55.95p | +2p increase |
| 1 Mar 2027 | 57.95p | +2p (returns to pre-March 2022 level) |
Key Facts
Tax on tax
VAT at 20% is charged on the totalprice including fuel duty. This means you pay tax on tax - the 52.95p duty alone generates an extra ~10.6p in VAT. This "tax on tax" effect is unique to fuel.
The 5p cut
In March 2022, fuel duty was cut by 5p from 57.95p to 52.95p. This temporary cut is being phased out: duty rises by 1p in September 2026, then 2p in December 2026, and 2p in March 2027.
RTFO & Green Obligations
The Renewable Transport Fuel Obligation (RTFO) requires suppliers to blend biofuels (E10 = 10% ethanol). Greenhouse gas reduction obligations and development fuel requirements add ~3-4p per litre.
Retailer margins
Forecourt profit margins are typically just 3-8p per litre. Supermarkets often run fuel at near cost to attract shoppers, while independent stations need higher margins to cover operating costs.