5th September 2026
There is one thing that British and American motorists can agree on at the moment.
Filling the car is becoming painful.
Petrol and diesel prices have been climbing sharply as the continuing conflict involving Iran, disruption to oil supplies and pressure on global refining capacity push energy prices higher. Brent crude has been moving towards $100 a barrel again, and motorists on both sides of the Atlantic are feeling the consequences.
But there is a remarkable difference once we look at what drivers actually pay.
In Britain, the latest RAC figures put average unleaded petrol at around 163.4 pence a litre, with diesel at almost 185 pence a litre.
Across America, the national average on 4 September was approximately $4.15 a US gallon for regular petrol and $5.85 for diesel. The diesel figure is particularly remarkable because it is a new US record.
At first glance those American figures look expensive. But a US gallon is 3.785 litres, and when the American prices are converted into pounds and litres the difference becomes very obvious.
Using an exchange rate of roughly $1.35 to the pound, the American petrol price works out at about 81p a litre.
The American diesel price works out at approximately £1.14 a litre.
Compare that with roughly £1.63 for British petrol and £1.85 for British diesel.
So even during an American fuel-price crisis, British motorists are paying roughly twice as much for petrol and around 60% more for diesel.
That is an extraordinary difference.
What does that mean at the fuel pump?
Imagine filling a 50-litre tank.
At the current British average, 50 litres of petrol costs about £81.70.
The equivalent quantity of petrol in America costs roughly £40.50.
For diesel, the British motorist would pay about £92.50 for 50 litres.
The American equivalent is approximately £57.
That means the British motorist could be paying around £41 more to fill a petrol car and £35 more to fill a diesel car than an American motorist buying the equivalent amount of fuel.
And these are national averages. Anyone living in a rural area, where there can be fewer filling stations and greater distances between them, knows that the price on the forecourt can be higher still.
For people in places such as Caithness, where journeys are often long and public transport cannot simply replace the car, this isn't an abstract economic statistic.
It is money coming directly out of household budgets.
But the Americans are hurting too
It would be wrong to suggest that American motorists are escaping the fuel crisis.
They are not.
The US national average for regular petrol is now around $4.15 a gallon, compared with about $3.20 a year ago. Diesel has risen even more dramatically, reaching $5.85 a gallon compared with around $3.71 a year earlier.
For American farmers, truckers, construction companies and delivery businesses, the diesel increase is particularly serious.
Diesel is the fuel that moves much of the American economy. It powers heavy trucks, agricultural machinery, construction equipment and many other commercial vehicles.
So the American economy is facing exactly the same problem Britain is facing.
Higher fuel costs eventually find their way into the price of almost everything.
The farmer pays more to operate the tractor.
The haulier pays more to move the food.
The supermarket pays more to receive it.
The consumer eventually pays more at the checkout.
The difference is that the American motorist starts from a much lower pump price.
So why is British fuel so much more expensive?
The answer is sitting on the forecourt in the form of taxation.
The international oil price is broadly a global price. Britain does not have to pay twice as much as America for a barrel of crude simply because British drivers are filling their cars.
A large part of the difference comes from what governments add to the price.
Britain currently applies Fuel Duty to standard petrol and diesel at 52.95p a litre, while VAT is then charged at 20% on the fuel price including the duty.
The Government has temporarily reduced Fuel Duty from what would otherwise have been a higher rate, but that temporary reduction is already being unwound. The main rate increased by 1p a litre on 1 September 2026, with further scheduled increases later.
That is an important point.
Just as motorists are being hit by a global oil shock, the tax component of their fuel bill is also moving upwards.
It means that when the wholesale price rises, the Treasury does not simply stand aside.
VAT rises automatically with the underlying price because it is charged as a percentage.
So there is a particularly unpleasant mechanism at work.
Oil becomes more expensive.
The wholesale price of petrol and diesel rises.
VAT is then charged on that higher price.
The motorist therefore gets hit by both the underlying increase and a larger VAT payment.
America has fuel taxes too
Of course, American drivers do pay fuel taxes.
There are federal and state fuel taxes, and the amount varies considerably depending upon where you live.
That is why comparing one American state with Britain can produce very different results.
California, for example, can have dramatically higher petrol prices than states with lower taxes and different fuel markets.
But even taking the US national average, the difference remains enormous.
The American system simply places much less of the cost of government onto each litre of road fuel than Britain does.
And that matters because fuel is not just another consumer product.
It is an input into almost everything.
The hidden cost is bigger than the price on the pump
This is where the current fuel crisis becomes much more serious.
When petrol rises, people notice it immediately.
They see the numbers on the forecourt and complain about the cost of filling the car.
Diesel is potentially even more important.
A diesel price shock works its way through the economy because diesel powers the trucks, vans, agricultural machinery, construction equipment and other vehicles that move goods and provide services.
That means the impact can eventually appear in the price of food, building materials, deliveries, repairs and virtually anything that has to be transported.
And Britain is particularly exposed because we are already dealing with high costs in many other areas.
Households are facing mortgage or rent pressures, food costs, council tax, energy bills and other increases. Adding another substantial increase in transport costs is not insignificant.
For rural Britain it can be considerably worse.
A family in central London may have alternatives to the car.
A family in rural Highland Scotland often does not.
A tradesman cannot carry his tools and materials on a bus.
A farmer cannot take the tractor to the field on a train.
A delivery company cannot simply absorb another large increase in diesel indefinitely.
A pensioner living in a remote community may have no realistic alternative to driving to the supermarket, doctor or hospital.
The price of fuel therefore has a very different impact depending upon where you live.
And there is another warning here
The comparison with America also exposes something that is easily forgotten during political arguments about fuel.
Governments can influence the price at the pump, but they cannot control the world oil market.
If Brent crude approaches $100 a barrel again, Britain cannot legislate that away.
But governments can decide how much tax they take from every litre.
That does not mean Fuel Duty should simply be abolished. The Government has to raise revenue somehow, and motorists also create costs through road use and environmental damage.
But it does raise a legitimate question.
At what point does taxation of fuel become counterproductive?
If fuel becomes so expensive that people drive less, businesses reduce activity and transport costs feed into inflation, the Treasury may gain more revenue per litre but the wider economy can lose elsewhere.
There is also an uncomfortable contradiction in asking people to move towards electric vehicles while continuing to depend heavily upon petrol and diesel taxation for government revenue.
As the number of electric vehicles grows, the tax base provided by petrol and diesel will eventually shrink.
That problem has not gone away.
It is merely waiting further down the road.
Britain cannot tax its way out of an oil crisis
There is a temptation whenever fuel prices rise to blame either the oil companies, the Government or international events.
In reality, all three can matter.
Oil companies operate in a global market.
Governments determine taxation.
Wars and geopolitical tensions can disrupt supplies.
But the UK-US comparison tells us something important.
The underlying commodity is largely the same.
The global oil market is largely the same.
Yet the motorist can pay dramatically different prices depending upon which side of the Atlantic they happen to live.
That is not an accident.
It is the consequence of different taxation systems, different energy policies and different approaches to the cost of motoring.
And perhaps that is the question British motorists should be asking as they watch the numbers on the forecourt climb again.
When an American driver complains about paying $4.15 for a gallon of petrol, they are genuinely facing a serious fuel-price shock.
But when that same gallon is converted into British measurements and currency, the equivalent American price is only around 81p a litre.
A British driver is paying roughly twice that.
So the next time someone says that Britain is simply paying the price of expensive oil, perhaps the more accurate question is this:
How much of the pain at Britain's pumps is caused by the price of oil, and how much is created by the price of government?
Because for millions of British motorists, particularly those living in rural areas where the car is not a luxury but a necessity, that distinction is becoming increasingly important.