What is UK Fuel Duty? How Much Petrol Tax Do You Pay Per Litre?
Over half of what you pay at a UK petrol station goes to the government as tax. Here's how fuel duty works, why it exists, and how it's changed.
Fuel duty rate
52.95p
per litre (petrol & diesel)
Frozen since
March 2022
5p/litre cut in Spring Budget
Tax as % of pump price
~55%
at 140p/litre pump price
What is Fuel Duty?
Fuel duty (officially "hydrocarbon oil duty") is an excise tax charged by the UK government on the sale of petrol, diesel, and other road fuels. Unlike VAT, which is a percentage of the price, fuel duty is a flat rate per litre — currently 52.95p/litre for both petrol and diesel.
The tax is paid by fuel importers and producers when the fuel is "put to home use" (enters the UK market). The cost is then passed down the supply chain and ultimately to you at the forecourt.
Fuel duty is collected by HM Revenue & Customs (HMRC) and raises approximately £25–£27 billion per year — one of the UK government's largest single revenue streams.
How the Pump Price Breaks Down
At a typical pump price of 140p/litre:
Note: VAT is calculated on the full pump price including duty. Figures are approximate.
Tax on Tax: The VAT on Fuel Duty
One of the most controversial aspects of UK fuel pricing is that VAT (20%) is charged on the full pump price — including on the fuel duty itself. This means you pay tax on a tax.
For example, at a 140p pump price: the pre-VAT price is 116.7p (of which 52.95p is duty). VAT at 20% adds 23.3p — but 20% of the 52.95p duty alone is 10.6p. So over 10p of your fuel bill is VAT on the duty.
This structure means that when fuel duty rises, the government collects extra VAT too — a double benefit to the Treasury from any duty increase.
History of UK Fuel Duty
UK fuel duty has had a turbulent history:
UK vs European Fuel Duty Comparison
The UK has one of the highest fuel duty rates in Europe. Here's how it compared in early 2025 (approximate figures, duties change with exchange rates):
| Country | Petrol duty (approx. pence/litre) |
|---|---|
| Netherlands | 85p |
| Finland | 75p |
| France | 72p |
| Germany | 70p |
| UK | 52.95p (frozen) |
| Spain | 50p |
| Italy | 73p |
| Luxembourg | 50p |
| Bulgaria | 35p |
Duties converted to pence at approximate exchange rates. Figures change frequently.
The Future of Fuel Duty as EVs Take Over
The government faces a structural challenge: as petrol and diesel cars are gradually replaced by electric vehicles, fuel duty revenue will decline. EVs don't pay fuel duty.
The Office for Budget Responsibility (OBR) projects fuel duty revenues will fall significantly over the next decade as EV adoption accelerates. The government must either raise fuel duty on remaining petrol/diesel drivers (increasing the burden on those who can't yet afford or access EVs) or introduce a new road pricing mechanism.
Road pricing — charging vehicles by the mile driven — is the most commonly proposed replacement. This would apply to EVs and petrol/diesel cars alike, replacing fuel duty with a per-mile charge that could be varied by time, location, and vehicle type.
Fuel Duty FAQ
What is the current UK fuel duty rate?
The UK fuel duty rate is 52.95 pence per litre for both petrol and diesel. This rate has been frozen since March 2022, when Chancellor Rishi Sunak cut duty by 5p/litre in response to record high pump prices. The freeze has been extended through multiple Budgets since then.
How much tax is in a litre of petrol?
At a pump price of around 140p per litre, approximately 75–80p is tax. This includes the flat fuel duty of 52.95p plus VAT at 20% on the full pump price (including duty). VAT adds around 23–25p at 140p/litre pump prices. Together, tax accounts for about 55% of what you pay at the pump.
Is VAT charged on fuel duty?
Yes — this is one of the more controversial aspects of UK fuel tax. VAT is calculated on the total pump price including the fuel duty itself. So you pay 20% VAT on the duty, meaning you effectively pay tax on a tax. This is sometimes described as "double taxation" on fuel.
When will the fuel duty freeze end?
The fuel duty freeze has been repeatedly extended. As of April 2025, duty remains at 52.95p/litre. Each year the Chancellor must decide whether to extend the freeze, increase duty by inflation, or cut it further. The 2024 Autumn Budget extended the freeze through 2025–26. Future decisions are announced in the annual Budget.
How does UK fuel duty compare to other European countries?
The UK has one of the highest fuel duty rates in Europe. Before the 5p cut in 2022, the UK was the highest. Countries like Germany, France, and the Netherlands also have high fuel taxes. Southern and Eastern European countries typically have lower fuel duties, which is why petrol can be significantly cheaper in countries like Bulgaria, Romania, or Luxembourg.
How much fuel duty revenue does the UK government collect?
The UK government collects approximately £25–£27 billion per year in fuel duty. This is one of the UK's largest single tax revenues. As petrol and diesel car sales decline with the shift to electric vehicles, fuel duty revenues will decrease — which is why the government is exploring new road pricing models for EV drivers.
See the Live UK Fuel Price Index
Track national average petrol and diesel prices with Fuelr's live price index.