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The graph that shows where your money goes when you fill up with petrol

Of the price of unleaded petrol, around 81.4p comes from the wholesale cost of petrol. Up to 10 per cent of the fuel itself is also biofuel, adding 12.49 pence to the total.

The retailer then takes a profit of 3.38p and the delivery and oil company gets 1.7p.

Fuel tax is then levied at a flat rate of 52.95p, bringing the running total to 151.92p.

Finally, VAT is charged at 20 percent of the total amount, which adds another 30.39 percent.

That brings the total to 182.31p – and means fuel tax and VAT make up 29 per cent and 17 per cent of the cost respectively.

It’s a similar story for a liter of diesel, with fuel tax and VAT accounting for 28 per cent and 17 per cent of the total cost of 188.05p (or 45 per cent of the total).

By far the biggest factor in rising petrol prices at the pumps is the price of oil.

Since Russia began its invasion of Ukraine when oil was trading at around $89 a barrel, the price of Brent crude has risen to $123 a barrel — a 38 percent increase.

This has caused petrol prices to rise by a similar proportion compared to last year’s average price, which was around 133.36p a litre, the RAC says.

However, rising oil prices are almost entirely out of the government’s control – while the levels of fuel taxes and VAT are well within the Chancellor’s hands.

The Taxpayer’s Alliance argues that the current level of fuel duel is “far too high and economically damaging”.

The lobby group said: “Deteriorating local air quality and contributing to climate change are both reasonable arguments for some level of special taxation on fuel and all fuels.

“The problem is that these arguments only support a much lower fuel tax than the current rate.”

It has been claimed that the Government’s own analysis found that the carbon tax on petrol should have been 1p in 2015, rising to 18p by 2030.

Mr Sunak cut the fuel tax by 5p to 52.95 in his March spring statement, the first time since 2011 that the rate has been reduced or changed at all.

However, Michael Gove has hinted that more financial help could be on the way for motorists on the road battling rising fuel prices.

Speaking on Sky News this morning, the Leveling Up secretary said: “Of course we are looking at whatever action is necessary to help people with the cost of living.”

He also stressed that the government wants to ensure that petrol dealers pass on the existing fuel tax cut.

https://www.telegraph.co.uk/business/2022/06/09/price-petrol-graph-shows-money-goes/ The graph that shows where your money goes when you fill up with petrol

Russell Falcon

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