Why is diesel more expensive than petrol?

    It happens to everyone: your fuel tank icon hits empty. But why does one fuel option cost so much more than another at the pump? From how different fuels are produced, to shifting UK regulations, and global events, many factors play into the price gap between diesel and petrol.

    This guide helps clear the air on why diesel tends to hit your wallet harder than petrol, how diesel use affects the environment, and its impact on how much your car is worth if and when you decide to sell

    With diesel-specific charges and the 2035 electric switchover on the horizon, it’s more important now than ever to understand the nitty-gritty of diesel engines and UK fuel pricing. 

    What is diesel?

    fuel being pumped into a car
    Diesel engines are known for their fuel efficiency and torque.

    The type of fuel your car uses depends on its engine. Powering a significant proportion of vehicles globally, diesel engines rely on compression ignition. Unlike petrol engines, which use spark plugs, diesel engines inject diesel, a fuel derived from crude oil, into the air in your car’s cylinders when the vehicle is turned on. The resulting reaction drives your engine’s pistons, creating power and moving your car forward. 

    However, diesel typically costs more produce than petrol, which drives up its price. 

    Does a diesel engine impact car valuation?

    In the past, the UK government promoted diesel vehicles for their fuel efficiency (as compared to petrol cars), leading to a surge in sales. Nearly half of all new cars and almost all vans and Heavy Goods Vehicles (HGVs) in the UK were diesel. 

    However, recent pollution studies and emissions scandals have shifted the narrative. Diesel tax hikes and urban emission charges, like ULEZ in London and Clean Air Zones (CAZ) and Low Emission Zones (LEZ) nationwide have steered the market away from diesel.  

    Despite the drawbacks, diesel cars still offer many advantages, including superior fuel efficiency and engine durability. Although the UK’s pledged to phase out the sale of internal combustion engine vehicles in the next few decades, it’s unlikely that used diesel cars will be banned outright.

    Larger, pricier diesel vehicles still find considerable buyers, while smaller-engined models remain viable, unless they’re non-compliant for daily city driving. 
    To get a better understanding of your diesel car’s value, try Motorway’s free Car Value Tracker. If you live in or near a CAZ, be sure to also check your car’s ULEZ compliance status as this can impact its market value.

    Why diesel?

    a shell petrol station
    It’s imperative for diesel vehicle owners to stay up to date with the latest regulations.

    As of June 2023, over 11.4 million diesel vehicles were cruising on UK roads. Despite diesel-specific taxes and charges, diesel cars continue to be a substantial force in the country’s automotive landscape, prized for two main reasons:

    ✅ Fuel efficiency

    Despite a higher price tag at the petrol station, individuals opt for diesel vehicles due to their notable fuel efficiency. Commuters covering substantial distances find diesel’s longer mileage per gallon economically attractive, offsetting the initial cost. 

    Diesel’s longer mileage per gallon makes it a top choice for individuals emphasising cost-effective, long-term fuel consumption.

    ✅ Performance

    Consumers’ vehicle choices are influenced by performance expectations. Petrol vehicles often appeal to motorists prioritising smoother acceleration and city driving, while diesel’s excellent torque attracts those requiring robust power for heavy-duty tasks. Diesel cars make sense for: 

    • Long journeys: Diesel engines still save you money on long journeys and big annual mileages versus petrol equivalents. If you generally cover 15,000 miles or more in a year, then you can cut costs.
    • Rural locations: The focus on diesel taxation in urban areas means that older diesel vehicles are not a sound investment. Diesel cars which meet Euro 6 standards or above are largely exempt from new charges at the moment, but this may change in the future. Regular urban driving can also clog the diesel particulate filter.
    • Larger vehicles: Diesel engines still make sense if you want to buy a people carrier, or you are considering an SUV. The torque and power of a diesel engine low in the rev range makes big differences to fuel economy. And it’s also easier to drive as – unlike with petrol versions – you don’t need to rev the engine hard to start making progress.
    • Towing: If you plan on regularly towing a caravan, trailer, or any other type of load, then a diesel engine will benefit you for the same reasons as it does in larger vehicles.

    With a high number of diesel vehicles on UK roads, diesel’s significance in the nation’s fuel consumption landscape is undeniable. However, amidst environmental concerns, shifting trends toward cleaner alternatives are beginning to reshape how Britons think about fuel types and car preferences more broadly.

    Additional fuel type considerations

    🚩 Fuel cost

    Fuelling up on diesel typically costs more than petrol. Diesel’s formulation is inherently more complex than petrol due to its higher energy density and combustion characteristics. Unlike petrol, diesel must withstand higher compression ratios in engines, requiring intricate refining processes.

    Additives that optimise combustion and prevent engine deposits are inserted during the refinement process. Because of diesel’s susceptibility to cold weather, additives that prevent waxing are also added. While ensuring diesel’s efficiency, these additional processes drive up production costs and impact the final price at the pump. 

    Fuel prices are also particularly sensitive to the principles of supply and demand. Global geopolitical events, economic shifts, and seasonal production and consumption variations influence the availability and cost of crude oil. As demand fluctuates, so does the price at the pump.

    The cost of fuel is determined by multiplying the fuel consumption (measured in miles per gallon or kilometres per litre) by the fuel price per gallon or litre. However, factors including individual driving habits, vehicle conditions, and market fluctuations introduce nuances to this equation, impacting the accuracy of cost predictions.

    🚩 Regulatory landscape

    Government regulations and incentives significantly shape consumer choices. Environmentally-focused subsidies, emission standards such as the Euro 6 guidelines for new diesel cars, and future restrictions such as the 2035 electric switchover all influence whether individuals opt for petrol or diesel vehicles. 

    In the UK, fuel duty is a significant contributor to prices. Imposed by the government to fund infrastructure projects, the UK fuel duty tax is included in the price you pay at the pump on diesel, petrol, and other fuels. The rate you pay depends on the type of fuel purchased; petrol, diesel, biodiesel, and bioethanol all come in at 52.95 pence per litre.

    More on shifting fuel regulations and diesel charges can be found here.

    🚩 Environmental impact 

    Aside from vehicle regulations, environmental factors also guide consumer choices in car types. Petrol vehicles generally emit fewer particulates, appealing to eco-conscious consumers. However, diesel’s lower carbon dioxide emissions position it favourably for those aiming to reduce their overall environmental footprint. 

    Contrary to popular belief, diesel can actually be more fuel efficient than petrol alternatives, especially on longer journeys.  

    🚩 Technological advancements

    The development of cleaner diesel engines and hybrid options provides consumers with additional choices in engine types, blurring the lines between traditional petrol and diesel.

    The future of diesel pricing

    the fuel price at a station
    There is still a strong market for used diesel vehicles in the UK.

    As we drive into 2024, the price of diesel and popularity of diesel vehicles continue to fluctuate. Evolving environmental concerns and the global push towards sustainable energy sources are poised to continue to impact diesel costs. 

    UK governmental policies, aimed at reducing emissions, may introduce changes in taxation, directly influencing the price at the pump. Simultaneously, advancements in clean diesel technologies and alternative fuels add a layer of complexity to the diesel pricing narrative. 

    Navigating this dynamic terrain requires a keen eye on emerging trends, as the road ahead promises both challenges and opportunities in the ever-changing realm of diesel costs.

    FAQs

    Does petrol require a higher cost to process than diesel?

    Petrol generally incurs a lower processing cost than diesel due to its simpler refining process. This efficiency contributes to petrol’s affordability in comparison to diesel.

    Why does diesel cost more than gas when it’s less refined?

    Despite being less refined, diesel costs more than petrol due to its complex refining processes and additives. Diesel’s superior energy density and demand for additional refining steps in the production process contribute to its higher price.

    Are UK fuel prices regulated?

    Fuel prices in the UK are not directly regulated by the government. They are influenced by market forces, including global oil prices, taxes, and competition among retailers. However, the UK government does levy a fuel duty on all fuel types.

    How can I track the value of my car?

    graph of a BMWs value
    Tracking your car’s ongoing valuation is a smart move for your personal finances

    In today’s complex car market, a diesel engine could impact the final price of your vehicle if and when you choose to sell your diesel car.

    While the value of all vehicles depreciates over time, there’s no one rule accurately describing the rate of pricing changes. That’s where Motorway’s Car Value Tracker comes in. Our Car Value Tracker provides a free, reliable monthly price alert for up to six vehicles at once, keeping you up to date on how much your car is worth. 

    Follow changes to your car’s value to choose the best time to sell, and make informed choices about investments in your car’s maintenance.

    Selling your car?

    Read about everything you need to know about how to sell your car with more guides here. There’s a lot to learn as Clean Air Zones and emissions standards in the UK change in the run-up to 2030.