The higher price of diesel results from the Government's recent tax increases, which have increased its duty to 82.5% of the pump price, according to figures from the AA. This means that for every £10 spent on diesel only £1.75 actually goes on fuel. The tax on unleaded fuel is similarly high at 81.7%, again leaving under £2 spent on fuel for every £10 paid. If the tax was stripped away British drivers would pay less for fuel than anywhere else in Europe.
The cost to fleets of this additional tax is substantial, with a standard 100-car diesel fleet in the UK facing an annual bill of £112,200, compared to £65,144 in Spain, assuming each car drove 15,000 business miles and achieved 40mpg, thereby consuming 1,700 litres of diesel. The unleaded petrol bill for a 100 car fleet would be almost £50,000 higher than an identical fleet in Spain, assuming each car covers 15,000 business miles a year and achieves 35mpg, thereby using 1,950 litres of fuel. In this example the UK fleet's fuel bill would be £128,700, whereas the Spanish fleet only has to pay £83,655 - both prices include VAT.