Why is diesel more expensive than petrol?

Last updated April 6th, 2023

A quick look at the UK’s petrol and diesel pricing data from over the last 20 years reveals a clear trend: the cost of diesel fuel has almost always been higher than petrol.

Prices for both petrol and diesel saw a sharp increase in 2021 and 2022. Average prices per litre peaked at 191.25p for petrol and 199.02p for diesel in June 2022.

Struggling to keep track of your fuel costs? Our free fuel cost calculator can help you work out your weekly, monthly – and even annual fuel spend. Don’t forget to check out our guide to finding the cheapest fuel prices near you.

As of March 2023, the average price for a litre of petrol sits at 147.28p, compared with 166.05p for diesel. Although the pandemic and conflicts in Europe have caused fuel shortages, the price of diesel seems to have been disproportionately affected. So, why is this the case?

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Why does diesel cost more than petrol?

More people in the UK drive petrol vehicles than diesel equivalents. However, more diesel fuel is sold in the UK than petrol; this is due to a high number of commercial vehicles using diesel fuel.

Aside from this, import costs also have an impact on diesel prices. Diesel fuel has larger molecules than petrol, which means it is a heavier material - and this increases its import prices.

What affects fuel prices?

Fuel costs are calculated based on fuel tax and the availability of the fuel itself.

  • Fuel tax

    UK fuel prices are some of the world’s highest, because 52.95p out of every pound is taxed. The same level of tax applies to all types fuel in the UK, including petrol, diesel, and even the cleaner Liquefied Petroleum Gas (LPG).

  • Supply and demand

    Demand for personal diesel vehicles has started to fall, but for commercial vehicles, the market remains strong. As such, UK-based fuel refineries are unable to meet the demand for diesel fuel. Therefore, diesel has to be sourced from other markets, which have higher import rates.

How many diesel cars are there in the UK?

According to data from the Department of Transport (VEH1103), at the end of 2021, of the 31.9 million licenced cars in Great Britain, 11.6 million were diesel-powered – compared to 18.7 million petrol-powered cars, and 1.6 million running on alternative fuels.

Sales for diesel cars have decreased by 52% since the start of 2022 - and in 2021, only 12% of all new cars registered were diesel. The fall in demand for diesel cars can be attributed to the looming 2030 petrol and diesel ban, which will prohibit the sale of all new petrol and diesel cars and vans.

However, diesel cars have taken a greater hit than their petrol rivals – and this is likely due to the impact of COVID-19 and the microchip shortage, which has significantly affected diesel engine manufacturers.

Why are people buying diesel cars even if they’re more expensive?

For many years, motorists were encouraged to purchase diesel cars for their superior economy on long-distance drives – and on the assumption that they were more environmentally friendly. (This is not necessarily the case; although diesel cars typically achieve better fuel efficiency than petrol equivalents, they often have a higher carbon footprint.)

Despite this, significant numbers of motorists continue to opt for diesel vehicles. After all, diesel cars can provide their own unique benefits. For instance, a typical diesel car provides around 20% extra miles per gallon (MPG). Opting for a premium fuel, such as premium diesel, can provide further benefits, including reduced build-up within your engine.

Thinking about whether a diesel car would be right for you? Check out our diesel car buying guide. Preparing to sell your car and make the switch to a different model? Find out what your car could be worth in an instant; enter your reg number into our free car valuation tool now!

Are UK fuel prices regulated?

No, UK fuel prices are not regulated – and there isn’t a single body that sets the price of fuel.

Instead, it’s up to individual retailers to decide on their pricing, based on the profits they are hoping to achieve - and the other factors we’ve already mentioned. This is why prices at the pumps fluctuate on a daily basis.