With the average forecourt in the UK charging £1.36 for a litre of petrol, and with costs apparently rising by the day, it seems we Brits have it tough – and we do, especially when compared to the rest of the world.
Petrol in the UK is 39% more expensive than the average worldwide price, with the UK ranked the 19th most expensive country in the world to top up your tank.
It’s no surprise that 7 out of the 10 cheapest countries for petrol are in the oil-rich Middle East, with the vast majority of the oil coming from the area.
Drivers in the South American country of Venezuela pay an unbelievable 2p for a litre of petrol – a whopping 6700% less than drivers in the UK! For many Venezuelans, access to cheap petrol is considered a birthright. The last time the Government tried to increase the price of fuel there was national riots. The petrol is so cheap that petrol smuggling is a multi-billion pound problem, which the Government is struggling to control.
Drivers in Venezuela pay only 2p for a litre of petrol
It’s an entirely different story in Norway though, where the average price of a litre of fuel is £1.68 – 23% more expensive than the UK, due to the high taxes the Norwegian government imposes. But it’s not all doom and gloom. Norway experiences some of the highest average wages in the world, which counteract the hefty fuel costs. In fact, only 7.4% of a Norwegian’s monthly income is spent on petrol.
However, it is arguably Turkey which is the most expensive nation for petrol -despite coming in second place. Here, drivers spend an eye-watering 34.2% of their income on petrol – just to get them from A to B.
Norway's prices are 23% more expensive than the UK's, however Norwegians receive some of the highest wages in the world.
In the UK, the price of a litre of fuel can be divided into 4 parts:
Fuel duty – Currently set at 57.95 pence a litre, and making up the largest proportion of the price, this is essentially an additional tax set by the government. A planned hike in fuel duty was recently cancelled by George Osbourne in the 2013 Budget.
Cost of petrol – This involves the cost of the raw element (crude oil) and its refinement at the plant. The cost of petrol is the second-highest portion of the overall price, and is the element most subject to change, depending largely on the price of oil.
VAT – Currently set at 20%, VAT is also levied on petrol purchases. Any change to the fuel duty, the petrol itself or the margin that the fuel companies take will be subject to this tax.
Retailer/delivery – The cost that retailers such as BP, Shell and Esso add on to a litre of fuel is actually very small compared to the taxes which the government set. Depending on the fuel company and the location of the forecourt, this is typically 5-7 pence.