Why diesel costs more than petrol, and sometimes less

Diesel costs more than petrol where it is taxed more, as in the United States, and less where it is taxed less, as in most of the EU. On top of tax, diesel shares its part of the barrel with heating oil and freight, so the gap widens in winter and when trucking is busy. One trip shows all three cases: in Rotterdam diesel is cheaper, in London both fuels carry exactly the same duty, and in Ohio diesel costs more again.

By the Refuelia Editorial Team · Reviewed 26 September 2026

It is mostly tax, and the split is a political choice

Open the receipt at most stations and you are paying for two very different things stacked on top of each other: the wholesale cost of the fuel itself, and government duty plus VAT layered on top of it. In the UK, both petrol and diesel currently carry fuel duty of 52.95 pence per litre, a rate held down by the extended duty cut announced on 20 May 2026, and due to rise to 55.95 pence per litre for both fuels from 1 January 2027, according to the amended rates published by HM Revenue and Customs. That is a deliberate policy of parity: Britain and Belgium are among the few countries in Western Europe where the excise rate on diesel matches the rate on petrol litre for litre.

Almost everywhere else in the EU, diesel is still taxed less than petrol. The European Union sets minimum excise duties of 0.359 euro per litre for petrol and 0.330 euro per litre for diesel, and member states build on those floors however their politics allow. According to the Tax Foundation's tally of rates as they stood on 1 January 2026, the Netherlands charges the highest petrol duty in Europe at 0.845 euro per litre, while Italy charges the highest diesel duty at 0.632 euro per litre. The EU wide average petrol duty is 0.570 euro per litre against 0.468 euro for diesel, a gap of roughly ten cents a litre before VAT is even added. Our fuel prices page puts this week's official petrol and diesel averages side by side for the 27 EU countries and the United States.

The United States runs the opposite way. The federal excise tax is 18.4 cents a gallon on petrol and 24.4 cents a gallon on diesel, a 6 cent premium that the Energy Information Administration attributes to the extra highway duty diesel carries plus a small storage tank fee both fuels pay. State taxes widen it further: the EIA's own figures for January 2026 put the average state tax at 33.27 cents on petrol and 35.50 cents on diesel. So the same molecule of diesel is taxed lightly in Warsaw, taxed level with petrol in London, and taxed more heavily than petrol across most American states. None of that is chemistry. It is three different legislatures making three different bets about who should carry the burden, hauliers, commuters or nobody.

Same barrel, fixed ratio: the crack spread

Underneath the tax layer sits something no finance ministry controls: what actually comes out of a barrel of crude. A refinery does not choose whether to make petrol or diesel the way a bakery chooses between loaves and pastries. Crude goes in, and it comes out as a fixed-ish slate of products at once, broadly two barrels of petrol for every one barrel of diesel in the industry shorthand known as the 3-2-1 crack spread, which weighs three barrels of crude against two of petrol and one of diesel, as both CME Group and RBN Energy describe it. You cannot easily turn a dial to make more diesel without also making more petrol, or the other way round, not without new capital spending on the plant itself.

That constraint is why demand for one fuel leaks straight into the price of the other. If diesel demand spikes, refiners run harder to capture the extra margin, and the petrol that comes along for the ride floods the market and gets cheaper. If petrol demand spikes during the summer driving season, the diesel riding alongside it does the same in reverse. The two products are joined at the hip inside the refinery even when they behave like strangers at the pump.

Diesel is heating oil's cousin: seasonality

Diesel has a relative that petrol does not have: heating oil. Both are distillates, cut from a similar part of the barrel, and in a cold winter a household burning heating oil is competing for the same product stream as a haulier filling a tank. The EIA has documented this directly. Distillate demand in the United States is seasonal because it heats homes, mostly in the north east, and every autumn that demand stacks on top of ordinary diesel consumption. In October 2022, diesel at New York Harbor hit its highest level in months, averaging 4.36 dollars a gallon, a spike the EIA linked to tight global inventories, reduced refinery output in Europe following industrial action, and the arrival of seasonal heating demand all at once. Distillate stocks that October had fallen to 25 days of supply, the lowest since 2008, against a five year average of 34 days.

Petrol has no seasonal cousin pulling on the same barrel. That asymmetry is one reason the diesel to petrol gap tends to widen heading into a cold winter and can ease again once the heating season passes, independent of anything a finance ministry does with duty.

Freight decides its own price, regardless of your commute

Petrol demand is mostly private cars doing the school run and the commute, a market that moves in fairly predictable seasonal waves. Diesel demand is trucks, ships, farm machinery and industrial plant, a market tied to freight volumes, harvest timing and global trade flows that have nothing to do with anyone's daily drive. The EIA has separately noted that distillate demand rises each autumn simply because agricultural harvest machinery burns through it. A shipping boom, a harvest that needs extra tractor hours, a construction upswing: each of these pulls on the same diesel pool that ordinary drivers also buy from, and none of it shows up in the petrol numbers at all. When freight is busy, diesel can get expensive relative to petrol even with duty rates held constant, simply because industry is outbidding drivers for the same distillate stream.

Countries are closing the diesel discount

For decades much of Europe deliberately taxed diesel below petrol, on the theory that diesel engines used less fuel per kilometre and that cheaper diesel supported hauliers and export industries. That logic has been unwinding since diesel's emissions record came under scrutiny after 2015, and the unwinding is a slow, uneven process rather than a single policy switch. The UK's move to identical duty on both fuels from January 2027 is the clearest example of full alignment. Belgium got there earlier. Most of the rest of the EU has narrowed the gap rather than closed it, still landing, per the Tax Foundation's 2026 data, on an EU wide average of about ten cents a litre in diesel's favour before VAT. Every country that narrows or closes that gap is making the same statement in different words: the old incentive to buy diesel is being dismantled on purpose, one budget at a time, and the pump price gap you see today is partly a record of how far along that process a given country has got.

Two stations ten minutes apart can beat two countries

All of the above explains why national averages differ. It does not explain why the station on the ring road can be twenty pence a litre more than the one by the retail park, and that gap is often the one a driver actually feels. The UK Competition and Markets Authority's enhanced road fuel monitoring report, published in May 2026, measured local price dispersion directly: on 7 April 2026, prices within a single local area varied by up to 16 pence a litre for petrol and 17 pence a litre for diesel, worth roughly 9 pounds on a 55 litre tank depending purely on which forecourt you chose. Over the five weeks to 13 April 2026 the report also found motorway stations charging up to 26 pence a litre more for petrol and 17 pence a litre more for diesel than non-motorway sites, and supermarket forecourts undercutting others by up to 8 pence for petrol and 11 pence for diesel. Those local swings routinely dwarf the national diesel to petrol gap. For scale, the European Commission's Weekly Oil Bulletin for the week ending 13 July 2026 put the EU wide weighted average at 1.851 euro per litre for Eurosuper 95 petrol and 1.823 euro per litre for automotive diesel, a gap of under three cents, smaller than the difference between two supermarkets in the same postcode.

That is the practical consequence of everything above. A national average or a weekly bulletin figure is useful for tracking policy or explaining a trend, but it does not tell a driver what they will pay in the next ten minutes. The number that matters is the one lit up on the sign at the station ahead, and a price another driver paid at that same station an hour ago is a more reliable guide to today's cost than any country level average, however recent the data behind it.

Related: in August 2026 the US diesel refining margin passed $100 a barrel for the first time on record — what the $100 diesel crack means at the pump.