Why is diesel so expensive in the UK?
 

I always accepted diesel was a few pence more expensive than unleaded and I came across 2 explanations that made sense. I was delighted to see the recent fuel price cuts driving diesel down to the same cost as petrol so I could pick diesel up at 100.9p per litre. However, going on holiday in Ireland, the best price for diesel is 102.9 cents per litre whereas petrol is 117.9 cents per litre. Changing to pence, its 90.2p per litre for diesel and 103.2p per litre for petrol. Northern Ireland has roughly the same prices as the rest of the UK. What is going on, why is diesel so expensive in the UK compared to petrol considering Irish diesel is the same stuff as UK diesel?

Perhaps the local taxes are different?

Robbing B*stard oil companies - thats what. they've realised it simpler to have a common price for P and D But they also realise more people are buyin more diesel (sales reps etc) and seeing how there is more of a margin in diesel as it takes less money per litre to produce they brought that in line with petrol.

I to feel you're pain having gone to petrol when it was cheaper than diesel last year - I'm now feeling the pinch as the costs are rising again Asda (wallmart) have it at 102.9 here but on the way to crewe I pass two places that have it at 107.9 (over a $7 gallon to our US friends).

Gordon Feckwit Brown isn't helping either...... (I won't truely vent because its a family site)

I believe it's in the region of 60% tax on petrol and diesel. The current emissions buzz will die off when there is a suitable percentage of people using diesel. Then they'll rise the taxes on that. Our Great Leaders are putting a 200 euro per annum levy on people who work in Dublin and have company car parking. Apparently it is to reduce congestion.... But they are forgetting that heavy traffic has died off since a load of people have lost their jobs and no longer commute.
What a mess.

ollie

There definately is a much larger market for diesel, since only small cars use petrol, while everything else (exept for space shuttles) is on diesel. Of course, companies are trying to increase their income - who isn't? Anyway, fuel prices have absolutely nothing to do with their cost of production, it's all politics, taxes, economics, etc.

Recently, I've noticed that each time the news says that fuel prices are going up I feel something like relief. "Maybe someone will finally get a hit in the wallet and start taking the bus." I know that I'll have to pay more at the pump, but my increase will be smaller than everybody else's. Maybe they'll stop laughing at my aeromods?

hahaha good point well put!

saying that - its still amazing to me that they can dig it, bring it halfway around the world, refine it and sell it for rougly 33p a litre before tax

Thanks to all for your comments! ;)

Here in NZ diesel sells for $1.02 and 91 petrol for $1.65 per liter. Vehicles are taxed per 1000km, typically a 2l Diesel car pays $35 per 1000km tax, heavier vehicles progressively more. Its based on weight. No road tax on petrol.

Farmers dont pay road tax on diesel vehicles. Its an old system, designed for farmers. Was only $18 per 1000 not so long ago.

Many owners wind back their speedos before each inspection, saving $$$ in road tax.

The government is looking to change things as so many people are dodging this tax.

They'll get you one way or the other.
 

There have been discussion in the US about changing the way driving and autos and fuel are taxed. The "problem" is we are finally getting vehicles that get better FE, and we are changing our driving habits and also driving less.

The net result is the feds and the states are generating less revenue from fuel taxes.

The government HATES getting less revenue, so...

We just about have all the technology in place to have all cars with an embedded gps thingee, and you pay per mile x other factors like weight x other factors like busy city = higher tax, etc etc etc. This will also "fix" the "problem" presented by electric vehicles, which currently avoid fuel taxes.

Jerks.

troy

Ill wrap my big brother GPS antenna in aluminum foil. Tax that you greedy....

Wow, you guys in the UK get the shaft on fuel prices! Guess that's why you also have cars with 1-2l engines that get 50-70 mpg.

And when they mandate new cars come with the tracking device thingy, well, more impetus to keep my old beater going. It's easy enough to rip out the dash and roll back the manual odometer.

The tracking device won't use the odometer anyway - as it has to differentiate between different roads. Well that's the plan for the UK anyway, i.e. motorways cost more than local roads - but that's a bit silly IMO as people'll just use local roads instead of motorways, and use up more fuel and increasing emissions in the process.

In fact, modern odometers are a lot easier to wind back - simply find a dodgy guy with a laptop and cable and he'll change the figures for you for $20 and only takes a minute. There are legal companies who will do this for £80-£100 ($160-$200). Or get yourself the kit like this one here.

Or even go to the scrapyard, and find a dashboard with a lower mileage on and swap it out - it takes me literally 2 mins to remove the instrument panel from my car - there's only 6 hex screws and one lever.

I think there would be riots if the tracking system was evr implemented. there is just too much big-brother sh*t going on at the mo. ID cards, cctv everywhere you turn national card usage tracking. It has to end somewhere!

I admit that with a GPS in a car it is theorically possible to know one's exact location, which is on the invigilation side. But could a GPS device be constructed in such a way that it only records the distances on certain roads, and maybe whether the speed limit was exceeded, but not the car's exact position? This wouldn't be invigilation, it would only be enforcing the law: speed limits and use of roads.

On the other hand, today's GPS units are still inaccurate: Imagine you are on a dirt road going parallel to a highway. The device may think you are within the position tolerance of the more expensive road and charge you for that. Also, you can hide in a tunnel, underground parking, etc.

From the government's track record, I would so not be surprised if they did it.

You're quite right, but GPS can be surprisingly accurate - when they work. I mean, when I'm on the motorway and leave the motorway early, my 4 year old car GPS realises I'm off the motorway only 5 metres away from the road itself. Newer car GPS has better chips with clever stuff such as WAAS, DGPS etc. I also use a walking GPS to track my walks/rides and they follow OS map paths almost exactly - apart from when I'm walking under trees where accuracy goes out of the window. My hiking GPS has WAAS so accuracy is quite often 0.5m - 1m (indicated on the unit itself), however sometimes 15-20m under trees.

You're quite right re: inaccuracy, underground parking, tin-foil around aerial, etc. On the other hand, remember that high end car GPS has 3 gyroscopes so the navigation works perfect no matter what reception is there and never makes a mistake on which road the car is. I have only seen one of these in action years ago when my manager needed to take me somewhere - he had one of these GPS and gyroscope navigation system and the arrow on screen was *exactly* realtime - including when driving backwards, the system knew that, also works perfect in tunnels whereas my cheap in-car GPS thinks I'm going forwards when I'm driving backwards and lags behind slightly especially when going around bends and is lost in tunnels, however it "guesses" my position based on my last known speed. Then again, I highly doubt governments would use the gyroscope system to complement GPS as it'd be bloody expensive. But then again mass production would drive down the cost.

On the other hand, there are some awesome possibilities that *could* come out of this tracking system if done *properly*[1]. Far, far better traffic management - traffic planners will know exactly how many cars are at various roads/junctions at what time and any recurring problems so they can improve the system. Cars can communicate with each other about traffic updates. Traffic lights could talk to cars and know which light to switch for the most efficient configuration for the position/speeds of cars approaching the junction.

[1]Knowing UK's government's *appalling* track record for IT projects, this is incredibly unlikely.

The tracking system was proposed, it was called Road Pricing, and the idea was to scrap current road tax and reduce fuel tax and replace it with a pay-per-mile system.
On more congested and busy roads at 8-9am in the morning you'd be charged £1 a mile, but if you live in the countryside on barely used roads it would be 2-3p per mile.
It seems fair because if you're an old lady who lives in the country and you only pop to the shops once a week a few miles away you barely pay any tax, and if you're a heavy commuter you pay more tax because you use the roads more, you pollute more etc.
Needless to say the idea was deeply unpopular, 1.5 million signed the official petition against it, and it died a death. One reason people felt they were being shafted with more tax and the fear that if they knew where you were they also know how fast you were going and you'd be automatically fined for speeding.

Current road tax is based on CO2 emissions, the less CO2 g/km your car puts out the less tax you pay, and if your car produces less than 100g/km you pay no road tax.
I paid £150 for a years tax on my car, it puts out around 150g/km, some people with big polluting cars can pay £400 a year.

Though this system only applies to cars produced after the year 2001, before that it's based on engine size.
UK Road Tax prices if you're interested.

Diesel is expensive because the government can get away with it, 70-80% of the cost per liter is pure tax. I also remember being told that diesel takes more energy to produce when distilling so oil companies charge more for it's production.

No wonder that people thought it was unfair: those that lose the most are usually the loudest complainers. Notice that not everybody would lose, mostly those who (in theory anyway) can switch public transportation and many others would gain. The closer it is to elections, the harder it is for politicians to push painful laws through. Most people are uncapable of thinking only in the short term: "I don't want to change today, I don't want to pay today, etc.", they aren't able to mobilise enough grey cells to understand that by paying today they won't have to pay even more tomorrow. The truth hurts and people don't like pain.

So this only depends on the engine and not on the driving style. I can imagine two cars with identical engines, both pay the same tax. But Driver A has a heavy foot, takes off and races everywhere, slows down to the speed limit only on red lights. FE_A= 16 l/100km. Driver B has heavily ecomodded his ride and is an ecodriving guru. FE_B= 5 l/100km. Now, even though they pay the same tax, they definately have a different CO2 footprint.

The tax system based on engine displacement isn't better, since today you can find a 2 liter turbodiesel that gets much better milage than a chip-tuned 1.2 liter gasser. That's why I'm all for taxing fuel. Want to pay less tax? Get a smaller car and ecodrive it!

I believe that Germany already has a GPS system for tracking the milage of trucks. If this is true, then maybe building on that system would be a good next step?

PS: I don't understand people who protest against methods of enforcing the speed laws. Or politicians who give in to them. Both are rotten sick, ble :(

This is *exactly* why I made this post in the first place - this makes sense *only* in the UK. Elsewhere in the world, diesel is cheaper. Diesel is 10% cheaper in the Irish Republic, and I highly doubt the oil companies supplying diesel there uses a different method of distilling diesel!

True, but do remember Driver A will use up more fuel, and pay more through fuel tax. The ecomodder will use less fuel, and pay less fuel tax. Like Katana says, UK fuel is about 80% tax. This method is simple and cheap - use more fuel, pay more tax. Drive through country roads, you use up more fuel, and thus more tax. Use motorways, you use less fuel, thus less tax. The satellite system will be a lot more accurate, but is it really worth the massive outlay? I believe the government is better off investing the money elsewhere, such as hydrogen fuelling stations, and clean methods of generating hydrogen for example.

You're quite right about taxing over engine displacement is a bad idea - my 1.7 litre Astra, which luckily comes under the newer tax system, would have cost £190 for 12 months if it was registered literally 1 year earlier[1], and my parents 1.25 litre Fiesta, which comes under the old tax system, currently costs £125 per year.

However, my Astra emits 119g/km of CO2, which falls in Band C of the new tax system, and currently costs £35 per year (£30 from 2010). If my parents Fiesta, which emits 165g/km of CO2, was registered literally one year later[1], it would have come under Band G of the new tax system, and would cost £150 per year (£155 from 2010), which I believe is fairer.

I quite like the new idea of a "showroom" tax starting April 2010, so anyone buying a Band M car (highest band) would pay £950 for the first year, and and then £435 per year afterwards. Cars under Band A-D will be tax free for the first year, and only A will continue to be tax free afterwards. This will hopefully encourage people to buy a car that emits at a lower band than they originally intended.

A happy ending to the story - my parents are currently looking to replace their Fiesta as it's starting to fall apart - very poorly built - and I'm really encouraging them to get a car that comes under Band A (sub 100g/km) that gets at least 60 MPGuk in the city and at least 90 MPGuk on the motorway. However, they're looking to use the scrappage scheme so the poor Fiesta will be crushed instead of being used for a few more years by someone else until it finally falls apart.



[1]The tax system changed in April 2000, my Astra was registered in 2001 and my parents Fiesta was registered in 1999. The tax system changed slightly in April 2009 and my Astra was, bumped up one band, from B to C to accomodate sub 100g/km cars however the costs stayed the same.