UK motorists hammered on diesel prices

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Diesel pump

A new study has revealed that Britain faces the fourth highest diesel prices in the world. It's a bitter blow for those who opted for diesel cars in order to cut costs - and ironically the number of people doing just that has been soaring - with sales of diesel cars outstripping those of petrol cars last year.

So why is it so expensive to fill up, and how does our petrol compare?



Blow for drivers

The research was carried out by Looking4Parking.com for This is Money. It found that the UK has the fourth-highest diesel prices in the world. With an average price of 141p per litre, and an average monthly spend of £133.53, it is only beaten by Norway, Italy and Turkey.

This has hit the many thousands of British drivers who turned to diesel cars in order to cut their costs. According to the Society of Motor Manufacturers and Traders, 50.8% of all cars sold in 2012 were diesel. This is largely because they tend to have lower CO2 emissions than petrol cars, which means car tax and company car tax is lower on diesel cars.

Buyers calculated that although diesel cars were more expensive, they would be cheaper to run. Now, the goal posts have moved, and unless you drive 20,000-30,000 miles a year, you will never recoup the extra costs associated with a diesel car.

Why so expensive?

The price of diesel has been inflated by the UK's exorbitant fuel taxes and the rise of wholesale prices. However, the same pressures fall on petrol prices, and Castle Cover insurance calculated last month that the UK doesn't even make the top ten of most expensive places to buy petrol (which are topped by Norway, Turkey, the Netherlands, Italy and Spain).

The AA says that one of the major problems is that garages are taking extra profit on diesel sales. It calculates that drivers are paying an extra 50p on a typical tank - which goes straight into the pockets of the garage owners.

Wholesale diesel recently averaged less than 2.5p a litre more expensive than petrol. Yet, at the pump diesel has averaged nearly 3.9p a litre dearer than petrol – a 1.4p-a-litre boost to profits.

Edmund King, the AA's president said: "To be fair, there is often much greater variation in the price of diesel among retailers in a town than with petrol. However, on average, the profit margin on diesel is consistently at least a penny higher than with petrol. The clear message to diesel drivers is to take advantage of the greater range of prices locally – some forecourts are more diesel-friendly than others."

There is some good news though - while we have the fourth most expensive diesel, the newspaper calculated that we don't make the top ten for least affordable fuel. It added average wages to the calculations, and found that the least affordable diesel is in Hungary - where 28.5% of income goes on fuel. This is followed by Turkey, where 25.8% of income is spent on it, Poland, where 21% of income goes on fuel, Slovakia at 18.4% and Greece at 17.6%.

By contrast in the UK a typical driver spends 7.9% of their income on diesel. It's a hideous cost, it's forcing us to make difficult decisions about how and when we travel, but at least we have the consolation that it could be even worse.