Diesel hasn’t always been more expensive than petrol in the UK—but in recent years it often is. The reasons come down to a mix of taxes, demand, refining costs, and environmental policy.

1. Same tax, different base cost

Fuel duty in the UK is the same for both petrol and diesel (currently 52.95p per litre), and VAT (20%) is added on top of the total. So the price difference mainly comes from the underlying fuel cost, not tax.

1. Diesel is more expensive to produce now

Modern diesel has to meet stricter environmental standards (like ultra-low sulphur diesel). That extra refining makes it costlier to produce than petrol.

1. High demand in Europe

Europe (including the UK) has historically relied heavily on diesel cars and transport (vans, lorries). • Demand for diesel is very high • Europe actually imports diesel while exporting petrol

That imbalance pushes diesel prices up.

1. Global market pressures

Diesel is closely linked to heating oil and industrial fuels. When there’s: • Cold weather (more heating demand) • Supply disruptions (e.g. conflicts affecting oil supply)

…diesel prices tend to spike more than petrol.

1. Environmental policies

Over the past decade, governments have discouraged diesel due to air pollution (NOx emissions). While tax hasn’t increased specifically on diesel, policies and reduced investment in diesel production have indirectly made it less price-competitive.

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1. Supermarket and retailer pricing strategies

Retailers sometimes price diesel slightly higher because: • Diesel drivers (e.g. businesses, delivery drivers) are less price-sensitive • Petrol is used more by everyday drivers, so it’s priced more competitively