On 2 October 2026 the RAC reported that the UK average price of diesel had reached a record 200.01p a litre, the first time it has gone above £2. Unleaded petrol averaged 174.71p, so diesel was costing about 25p a litre more.
Tax isn't the reason. Petrol and diesel are taxed at exactly the same rate per litre. The gap comes from what diesel costs before tax, which depends on a global market where diesel is in shorter supply than petrol.
The short version
- Fuel duty is the same on both: 52.95p a litre. VAT at 20% is added on top.
- Diesel's wholesale cost has risen much faster than petrol's since the end of February 2026.
- Diesel is used far beyond cars, in haulage, industry, heating and power, and global refining capacity for it is tight.
- The UK imports around half its diesel, so it is exposed to all of this.
Tax: the same per litre, but VAT adds up
Fuel duty on unleaded petrol and on diesel is 52.95p a litre, and has been since 23 March 2022. That rate includes the temporary 5p cut announced in the 2022 Spring Statement.
That cut still applies. According to the House of Commons Library, the government said in May 2026 that the freeze would be extended to the end of 2026, with a 3p a litre increase due on 1 January 2027 and the 5p cut fully withdrawn by 1 March 2027.
VAT is where diesel does pay more in cash terms. As the RAC Foundation explains, VAT at 20% is charged on both the product price and the duty. Because it is a percentage, a dearer litre attracts more VAT. Between late February and April 2026, the CMA found VAT added about 8.3p a litre to the rise in diesel prices, compared with 4.3p for petrol.
Why diesel costs more to buy wholesale
Diesel is in tighter supply worldwide
Diesel belongs to a group of fuels called middle distillates, which also includes the gasoil used for heating and in industry. The Competition and Markets Authority's May 2026 monitoring report said this is an area "where global refinery capacity is currently tighter relative to global demand". The CMA tracks this through the "refining spread": the gap between the cost of the crude oil in a litre of fuel and the wholesale price set by refineries and importers. By 20 April 2026, the diesel refining spread was "almost two times" the petrol one.
From the end of February to the week starting 20 April 2026, the CMA found diesel prices rose by 49.8p a litre, compared with 25.9p for petrol. Crude oil added roughly the same to both (10.0p for diesel, 10.3p for petrol). The big difference was the refining spread, which added 15.1p to diesel but 7.9p to petrol.
Diesel does more jobs than petrol
Petrol is mostly a car fuel. Diesel also powers lorries, vans and machinery, and, as the RAC Foundation's director told Fleet News in 2022, it is widely used "especially in continental Europe, as a method of heating and power generation". That means drivers compete with industry and heating demand for the same supply.
The UK relies on imports
The UK makes less diesel than it uses. The House of Commons Library says net imports made up 51% of UK diesel supply in 2024, up from 42% ten years earlier. After the Grangemouth and Lindsey refineries closed in 2025, only four UK refineries remain in operation.
The last diesel spike: 2022
After Russia invaded Ukraine in 2022, diesel prices climbed to a peak of 199.09p a litre in June 2022, according to the RAC. The RAC said at the time that the UK "used to import a third of our diesel from Russia" (Fleet News), and that moving away from Russian supply had tightened availability and raised wholesale costs (Fleet News). By early October 2022, diesel was about 17p a litre dearer than petrol.
Retailers' margins matter too. In its 2023 market study, the CMA found that increased margins on diesel left diesel drivers paying on average 13p a litre more from January to May 2023.
Why diesel passed £2 now
The RAC links the latest rise to the conflict involving the US and Iran, with no resolution in sight for reopening the Strait of Hormuz shipping route. It also warned that possible US restrictions on diesel exports could push prices higher still.
The RAC's figures show how much costs have climbed since 28 February:
| 2 October 2026 average | 55-litre tank | Increase per tank since 28 February | |
|---|---|---|---|
| Diesel | 200.01p a litre | £110.01 | £31.70 |
| Unleaded | 174.71p a litre | £96.09 | £23.03 |
The RAC estimates that a 45mpg diesel car now costs around 20p a mile to fuel, or about £2,020 a year for someone driving 10,000 miles. It has called on the government to cut fuel duty further or reduce VAT in the October budget.
What diesel drivers can do
Shop around
This makes the biggest difference. In its May 2026 report, the CMA found that on 7 April 2026 diesel prices within local areas varied by up to 17p a litre, and drivers could save up to £9 a tank by switching to the cheapest retailer within a 10-minute drive.
Try supermarket forecourts
The same report found supermarkets were on average up to 11p a litre cheaper for diesel than other retailers between 11 March and 13 April 2026. They aren't always the cheapest locally, so it's still worth checking.
Drive more efficiently
- Ease off on the motorway. The AA says 80mph can use up to 25% more fuel than 70mph.
- Change up early. The AA suggests around 2,000rpm in a diesel.
- Check your tyres. The Energy Saving Trust recommends checking pressures at least once a month and before long journeys.
- Don't idle. The Energy Saving Trust advises switching off if you'll be stationary for more than a minute.
- Lose the roof box. The AA notes that roof racks and boxes add to fuel consumption, so take them off when you're not using them.
The bottom line
- Diesel isn't taxed more heavily per litre. It costs more because global supply is tight and the UK relies on imports.
- VAT widens the gap, because it's a percentage of the price.
- The quickest way to cut your bill is to compare forecourts before you fill up.
PlugOrPump shows live B7 diesel prices for every forecourt near you, updated every 20 minutes. Search by postcode or browse fuel prices by town.