Get all your news in one place.
100’s of premium titles.
One app.
Start reading
Daily Mirror
Daily Mirror
Business
Levi Winchester

Petrol price breakdown explained - where what you're paying at the pumps really goes

Petrol prices surged to another record high this week, with it now costing £100 to fill up a £55-litre family car.

New figures from the RAC published show the average cost of petrol is now at 183.16p - up from 182.31p just yesterday.

Diesel has gone up to 188.82p - a rise from 188.05p in the last 24 hours.

The soaring cost of driving is becoming a national crisis, according to the RAC, who called it a “truly dark day” for drivers.

RAC fuel spokesman Simon Williams said: “While fuel prices have been setting new records on a daily basis.

“Households up and down the country may never have expected to see the cost of filling an average-sized family car reach three figures.”

But how exactly is the price at the pumps broken down, and what are you paying for? We explain…

How petrol prices break down at the pumps

When you pay for petrol or diesel, the cost is made up of lots of different elements - wholesale prices, the profit charged by the retailer, delivery of transporting the fuel, biofuel content, VAT and fuel duty.

For a 55-litre family car, the total charge you're paying for unleaded petrol at 183.16p a litre is:

  • Wholesale: 82.63p
  • Retailer margin: 2.76p
  • Delivery of the fuel: 1.70p
  • Biofuel content: 12.59p
  • VAT: 30.53p
  • Fuel duty: 52.95

Retail price: 183.16p

Tax cost: 83.48p

Tax as % of average retail price: 46%

For a 55-litre family car, the total charge you're paying for diesel at 188.82 a litre is:

  • Wholesale: 76.57p
  • Retailer margin: 6.67p
  • Delivery of the fuel: 2.10p
  • Biofuel content: 19.06p
  • VAT: 31.47p
  • Fuel duty: 52.95

Retail price: 188.82

Tax cost: 84.42p

Tax as % of average retail price: 45%

Unsurprisingly, the biggest bulk of the cost is the wholesale price, which is linked to the rising cost of oil.

Oil prices dipped on Thursday but still hovered near three-month highs, coming in at $123.07 a barrel for Brent crude.

JPMorgan Chase chairman and chief executive officer Jamie Dimon says the price of oil could rise to an eye-watering $175 later this year.

Other costs at the pump include VAT, which is charged at a rate of 20%.

Then there is fuel duty, which was cut by 5p-a-litre in March, from 57.95p per litre to 52.95p - but rising prices have led to outrage over retailers not passing this lower rate on to customers.

"March’s 5p fuel duty cut now looks paltry as wholesale petrol costs have increased by five times that since the Spring Statement," said Mr Williams.

"A further duty cut or a temporary reduction in VAT would go a long way to helping."

AA President Edmund King urged the Chancellor to slash fuel duty by a further 10p.

He said: “Enough is enough. The Government must act urgently to reduce the record fuel prices.”

Sign up to read this article
Read news from 100’s of titles, curated specifically for you.
Already a member? Sign in here
Related Stories
Top stories on inkl right now
One subscription that gives you access to news from hundreds of sites
Already a member? Sign in here
Our Picks
Fourteen days free
Download the app
One app. One membership.
100+ trusted global sources.