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The price of diesel fuel per gallon in the UK is influenced by various factors, including location, competition, market dynamics, and government policies. As of March 2024, Northern Ireland offered the cheapest diesel in the UK, with an average price of 148.1 pence per litre. In contrast, the Isle of Wight was the most expensive region, with prices peaking at 150.6 pence per litre. Overall, the average price of diesel in the UK has fluctuated, with a recent average of 144.14 pence per litre, including VAT, as of March 2025. The cost of diesel fuel is impacted by taxes, such as fuel duty and VAT, which can make up a significant portion of the price per litre. Additionally, factors like supply and demand, pipeline interruptions, and refinery issues can cause price fluctuations.
| Characteristics | Values |
|---|---|
| Date | 23/07/2025 |
| Average Price of Diesel per Gallon | 541.63 pence |
| Average Price of Diesel per Litre | 142.91 pence |
| Fuel Duty | 52.95 pence per litre |
| Cheapest Place to Buy Diesel in the UK | Northern Ireland |
| Average Price of Diesel in Northern Ireland | 148.1 pence per litre |
| Cheapest Retailers | Asda, Morrisons, Sainsbury's, Tesco, BP, Shell |
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What You'll Learn
Northern Ireland has the UK's cheapest diesel
As of March 2025, diesel costs an average of 144.14 pence per litre in the UK, including VAT. However, Northern Ireland has the cheapest diesel prices in the UK. In March 2024, the average price of diesel in Northern Ireland was 148.1 pence per litre, compared to 154.8 pence per litre in London, the most expensive region. This price difference is likely due to competition with filling stations across the Irish border, which operate under different competitive and fiscal conditions.
Fuel prices in the UK can vary significantly depending on location, competition, and market dynamics. For instance, prices can differ by a few pence per litre even between filling stations that are a short distance apart. Northern Ireland benefits from competition with the Republic of Ireland, resulting in lower prices for consumers.
The price of diesel in the UK is influenced by various factors, including supply and demand, interruptions in pipeline supply, refinery issues, and taxes. Taxes, including fuel duty and VAT, can make up a significant portion of the price per litre. In recent years, the UK government has frozen fuel duty at 57.95 pence per litre, with a cut to 52.95 pence in 2022 following the Russian invasion of Ukraine.
To find the cheapest diesel prices, drivers can use tools like the myRAC app, which helps locate the most affordable fuel options in their area. Additionally, cashback offers from credit card companies can offset higher diesel prices by providing savings or rewards for spending at filling stations.
While Northern Ireland consistently offers the lowest diesel prices in the UK, it's important for drivers to stay updated on price variations and take advantage of cost-saving measures like efficient driving and utilising independent retailers, in addition to supermarket and supermarket price changes.
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VAT and fuel duty significantly impact diesel prices
The price of diesel fuel in the UK is impacted significantly by VAT and fuel duty. As of March 2025, diesel costs an average of 144.14 pence per litre, including VAT. The price of diesel per litre is influenced by various factors, including the cost of oil, the strength of the pound, and wholesale costs. However, VAT and fuel duty play a significant role in determining the final price.
Fuel duty is a tax levied by the government on every litre of fuel sold, and it is included in the pump price. In recent years, the fuel duty rate has been frozen at 57.95 pence per litre. In 2022, following the Russian invasion of Ukraine, the duty rate was cut to 52.95 pence to address the rapid increase in fuel prices. This rate has been extended until Spring 2025. The duty rate applies to petrol, diesel, biodiesel, and bioethanol, and it is subject to annual revisions by the government.
VAT (Value-Added Tax), on the other hand, is applied after fuel duty and further increases the cost of diesel. The standard rate of VAT in the UK is 20%, and it is charged on the total price of the fuel, including the fuel duty. The combination of fuel duty and VAT can make up a significant portion of the final price of diesel per litre.
The impact of VAT and fuel duty on diesel prices is substantial. Even when fuel prices are low, these taxes can prevent prices from decreasing further. Additionally, when oil prices are falling, the impact of VAT and fuel duty becomes more noticeable, as the percentage of tax in the pump price increases.
The government's revenue from fuel duty and VAT is significant. Fuel duty alone generates over £26 billion annually, and when combined with VAT, vehicle tax, and 'showroom' tax, motorists contribute more than £40 billion per year to the government's funds. While the government has considered alternative models, such as a pence-per-mile driven charge, VAT and fuel duty continue to play a central role in diesel pricing in the UK.
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Diesel prices vary across the UK
Geographical variations also play a significant role in diesel prices. Northern Ireland, for instance, has been identified as the cheapest place in the UK to buy fuel. In March 2024, the average price of diesel in Northern Ireland was 148.1 pence per litre. In contrast, the Isle of Wight is one of the most expensive regions, with prices peaking at 150.6 pence per litre.
Local retail dynamics also contribute to price variations. The presence of supermarkets competing on price, such as Tesco, Sainsbury's, Asda, and Morrisons, can drive down diesel prices in certain areas. On the other hand, rural locations may experience higher prices due to their distance from fuel terminals, although this can vary as well.
To find the best prices, drivers are advised to use tools like fuel price comparison apps and websites. These resources allow users to locate the cheapest diesel prices in their vicinity, potentially saving them a significant amount of money over time. Additionally, taking small detours to visit cheaper forecourts and considering cashback options from credit card companies can further optimise diesel costs.
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Diesel prices are lower at supermarkets
As of March 2025, diesel costs an average of 144.14 pence per litre, including VAT. In the UK, Northern Ireland is the cheapest place to buy fuel. In March 2024, the average price of diesel in Northern Ireland was 148.1 pence.
Supermarkets, in general, have the cheapest fuel prices. The big four supermarkets—Asda, Morrisons, Sainsbury's, and Tesco—all lowered prices after the 5 pence fuel duty cut. BP-owned and Shell-owned fuel stations also applied the 5 pence cut (6 pence including VAT).
In June 2025, supermarkets cut fuel prices to as low as 121.9 pence per litre. For instance, a Sainsbury's in Huddersfield charged 121.9 pence per litre of petrol, while Asda's Park Royal forecourt in London charged 122.7 pence. A Sainsbury's store in Belfast sold diesel for as little as 126.9 pence. Rival supermarkets in the area also offered similar prices, as seen in Coleraine.
The RAC's Fuel Watch initiative helps ensure that retailers charge a fair price at all the UK's forecourts. It monitors wholesale prices and pump prices daily, covering the UK's big four supermarkets and many other brands. The Fuel Finder feature of the free myRAC mobile app can help you find the cheapest forecourts.
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Diesel prices are higher than unleaded
As of March 2025, diesel costs an average of 144.14 pence per litre in the UK, including VAT. This is higher than the average price of unleaded petrol, which costs 137.39 pence per litre.
Diesel prices are influenced by various factors, including demand, production costs, and taxes. Diesel fuel is commonly used in commercial vehicles, such as trucks, tractors, and boats, leading to a relatively high demand for diesel fuel, especially in Europe, China, India, and the United States. The transition to less polluting, lower-sulfur diesel fuels has also impacted production and distribution costs, making it more expensive to refine than gasoline.
Taxes play a significant role in diesel pricing. In the United States, the federal excise tax on diesel fuel is higher than that of gasoline. The higher tax on diesel is often justified by the greater damage caused to roads by heavier trucks and vehicles that use diesel fuel. Additionally, during an economic boom, the energy demand in industries rises, and diesel costs tend to climb faster than gasoline prices.
It's worth noting that fuel prices can vary significantly, even over short distances. For example, in March 2024, there was a 27 pence per litre difference in petrol prices between two filling stations located close to each other. Supermarkets generally offer the cheapest fuel prices, and it is advisable to use tools like fuel price comparison apps to locate the most cost-effective filling stations.
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Frequently asked questions
As of March 2025, diesel costs an average of £1.44 per litre, including VAT.
Fuel duty is charged by the government on every litre of fuel sold, and VAT is also charged on the total price. In recent years, the fuel duty rate has been frozen at 57.95 pence per litre. Following the Russian invasion of Ukraine, the rate was cut to 52.95 pence per litre in 2022.
The average price of diesel in the world is 99 pence per litre. The UK is cheaper than countries like Hong Kong, Singapore, Iceland, the Netherlands, and Denmark. Northern Ireland has the cheapest diesel prices in the UK at 148.1 pence per litre.
Diesel prices can vary depending on location, competition, and market dynamics. They fluctuate due to supply and demand, and interruptions in supply or refinery issues can also cause price changes.
You can use apps like myRAC or the Fuel Finder feature on the myRAC app to locate the cheapest diesel prices near you. It is also beneficial to drive efficiently, get to know the cheapest filling stations in your area, and consider cashback options with credit card companies.
