Pump Pricing
We answer some of the most frequently asked questions about fuel prices and how the cost of a litre of fuel is made up.
Pump pricing
Many of the UK’s drivers want to know how service stations set the price of petrol and diesel. The answer is a combination of wholesale cost of fuel products, government taxes, fuel storage & delivery costs and retail costs.
Does Shell publish fuel pricing in the UK?
Does Shell publish fuel pricing in the UK?
Shell is voluntarily making available its daily pricing data to be used by comparison apps and websites. The level of data we are providing is based on the recommendations of the Competition and Markets Authority. This data is updated each working day by noon to reflect the latest implemented prices at our retail stations – this might be the previous working day’s pricing, and may differ from the price at the pump due to the frequency of price updates.
This data is published for each of the company-owned forecourts in the Shell network. Around 500 Shell-branded sites in the UK are, however, operated by dealer groups who are independent from Shell and by law, we have no involvement in their fuel pricing.
We plan to contribute to an upcoming government consultation on the publication of live fuel prices.
The machine-readable data file to be used by comparison apps and websites is available here. Users may need to clear their cache to get the latest updated file.
Do pump prices in the UK track crude oil and wholesale prices?
Do pump prices in the UK track crude oil and wholesale prices?
Pump prices for petrol and diesel in the UK generally reflect trends in wholesale fuel prices. These are the prices that retailers such as Shell pay to the refineries that convert crude oil into petrol and diesel.
Wholesale prices for petrol and diesel usually track trends in the global price of crude oil. However, crude oil, petrol and diesel are separately traded commodities on world markets. This means that their individual prices can be volatile, depending on the balance of supply and demand and that they will not always follow the same trends. For example, the price of diesel at a UK forecourt could rise disproportionally to the global crude oil price if there is high demand for diesel and not sufficient refinery capacity to provide sufficient supply.
Overall, crude oil and wholesale costs account for around one-third of the price of a litre of petrol or diesel in the UK.
How much tax do motorists pay on a litre of fuel?
How much tax do motorists pay on a litre of fuel?
Around half of the cost of a litre of fuel are taxes in the form of fuel duty and Value Added Tax (VAT).
Fuel duty in the UK is set at 52.95 pence per litre, regardless of petrol and diesel prices. On top of that is the addition of 20% Value Added Tax.
Do fuel prices increase faster than they decrease – the so-called ‘rocket and feather effect’?
Do fuel prices increase faster than they decrease – the so-called ‘rocket and feather effect’?
Petrol and diesel prices on Shell’s company owned UK forecourts generally track wholesale price trends and in turn the crude oil price. Because duty and VAT makes up a significant proportion of the pump price, a rise or fall in the price of Brent Crude will only have a partial impact on the price at the pump. But these are not the only factors to consider for the cost of fuel (see above question)
What makes up the cost of a litre of fuel?
What makes up the cost of a litre of fuel?
This BBC graphic (dated 9 June 2022) helps to illustrate what makes up the cost of a litre of unleaded petrol in the UK.
Overall, crude oil and wholesale costs account for around one-third of the price of a litre of petrol or diesel in the UK. Around half of the cost of a litre of fuel are taxes in the form of fuel duty and Value Added Tax (VAT). The remainder is the costs of running service stations (for example electricity, labour and maintenance costs), distribution costs and retailer’s profits.
Why are prices different from one service station to the next?
Why are prices different from one service station to the next?
Prices can vary between service stations for a number of reasons – including wholesale price, transporting the fuel to forecourts and service station operating costs. Shell is only legally able to control prices at company-owned sites, which constitute approximately half of the Shell-branded network in the UK. The other half of Shell branded service stations are owned by independent dealers who set their own prices. Shell is unable to comment on any pricing regarding Shell branded dealer-owned sites as per anti-trust laws.
All of that means that prices can and do vary by region and service station.
Why are diesel and petrol prices not the same?
Why are diesel and petrol prices not the same?
Diesel and petrol are independently traded products and their relative prices reflect global market supply and demand dynamics. During a year the price difference between the two products can vary significantly.
How much profit do service stations make from a litre of fuel?
How much profit do service stations make from a litre of fuel?
Fuel retailers like Shell typically make a few pence profit on every litre of fuel we sell in the UK. The market is highly competitive, and we are constantly balancing the wholesale prices of petrol and diesel and our own retail costs, including staff costs, rent, electricity, maintenance and marketing, with the level of competition in the local area and the number of customers visiting each site. We want customers to choose Shell for our quality and competitively priced fuel, as well as offer a convenient stop for other services.
