Fuel duty and VAT: how much of the petrol price is tax?

The official average petrol price is 173.5p a litre (week of 28 Sep 2026). Of that, fuel duty is 53.0p and VAT is 28.9p. So 47% of the price is tax. The other 91.6p pays for the fuel itself, the biofuel mixed into it, delivery, and the retailer's profit.

How the two taxes work

Fuel duty is a fixed number of pence on every litre. It is the same for petrol and diesel, and it does not change when the oil price changes. VAT is 20% of the whole price, including the duty. That means you pay tax on the tax. Every 1p added to the cost of the fuel becomes 1.2p at the pump, and every 1p of duty costs you 1.2p.

The freeze and the 5p cut

Duty was 57.95p a litre from 2011 to 2022. It was frozen at every Budget in that time. In March 2022 it was cut by 5p to 52.95p. The cut was meant to last one year, but it has been kept every year since. Fuel duty brings the Government about £25 billion a year. The Office for Budget Responsibility still assumes the cut will end one day. The history page shows duty next to the pump price for every week since 2003.

What a change in duty would cost you

If the 5p cut ended, the pump price would go up by 6p a litre once VAT is added. That is £3.00 on a 50-litre fill. A 1p rise in duty costs £0.60 per fill. For comparison, the gap between the cheapest and most expensive forecourt in a typical town is often 8p to 10p a litre. Where you fill up matters more than any Budget change.