Is petrol cheaper in Australia or the UK?

Australia has significantly cheaper petrol than the UK. In March 2026, the average petrol price in Australia is around $1.70-1.90 AUD per litre (approximately 85-95 pence), while the UK average is 140-150 pence per litre. The main reason is tax — the UK charges approximately 53p per litre in fuel duty plus 20% VAT, whereas Australia's fuel excise is around 50 cents AUD per litre (about 25p) with 10% GST. UK drivers pay roughly 60% more per litre than Australians.

Why is fuel so much more expensive in the UK?

UK fuel prices are high primarily because of taxation. Fuel duty (approximately 53p per litre) plus 20% VAT means that about 50-55% of the pump price is tax. Australia's lower fuel excise (around 50 cents AUD, roughly 25p) and 10% GST result in tax making up about 35-40% of the pump price. The UK also has higher distribution costs due to its smaller geography and stricter environmental regulations.

Do Australians or Britons spend more on fuel per year?

Despite cheaper fuel, Australians typically spend more on fuel per year because they drive much longer distances. The average Australian drives 12,000-15,000 km per year, while the average UK driver covers 7,000-9,000 miles (11,000-14,500 km). Combined with Australia's larger, less fuel-efficient vehicles (SUVs and utes vs UK hatchbacks), total annual fuel spend is comparable: around $2,500-3,500 AUD for Australians and 1,500-2,200 GBP for Britons.

Fuel Prices: UK vs Australia — Which Is Cheaper?

If you've lived in both the UK and Australia, you know the sticker shock works both ways. Australians visiting the UK are stunned by 150p-per-litre petrol. Britons arriving in Australia can't believe they're paying under $2 AUD. But the picture is more nuanced than the pump price suggests. Let's break down the full comparison — taxes, costs per kilometre, and total annual spend.

Price per Litre: The Raw Numbers

As of March 2026, the average petrol price in Australia is approximately $1.75-1.90 AUD per litre (around 87-95p GBP). In the UK, the average is 140-150p per litre (approximately $2.80-3.00 AUD). That means UK drivers pay roughly 55-65% more per litre than their Australian counterparts.

Diesel shows a similar pattern. Australian diesel averages $1.80-1.95 AUD per litre, while UK diesel sits at 145-155p per litre. The gap is consistent across fuel types.

Why the Difference? It's Mostly Tax

The price gap is overwhelmingly driven by taxation. The UK charges approximately 53 pence per litre in fuel duty, plus 20% VAT on top of the entire pump price (including the duty itself). This means roughly 50-55% of every UK litre goes to the government.

Australia's fuel excise is around 50 cents AUD per litre (approximately 25p), with 10% GST applied to the total. Tax makes up about 35-40% of the Australian pump price. The difference in tax alone accounts for virtually all of the price gap between the two countries.

Cost per Kilometre: A Fairer Comparison

Price per litre doesn't tell the whole story. Australian vehicles tend to be larger and less fuel-efficient than UK cars. The average Australian car consumes around 10-11 litres per 100km, while the average UK car uses 6-8 litres per 100km (thanks to smaller engines, more diesels, and growing EV/hybrid adoption).

At $1.80/L and 10.5L/100km, the average Australian driver pays about 18.9 cents AUD per kilometre on fuel. At 145p/L and 7L/100km, the average UK driver pays about 10.2p per kilometre (approximately 20.4 cents AUD). The gap narrows significantly when you factor in vehicle efficiency.

Annual Fuel Spend

Australians drive more on average — roughly 12,000-15,000 km per year compared to the UK's 11,000-14,500 km (7,000-9,000 miles). Combined with larger vehicles, the average Australian spends about $2,500-3,500 AUD per year on fuel. The average UK driver spends roughly 1,500-2,200 GBP ($3,000-4,400 AUD).

Despite cheaper fuel, Australians' total annual spend is surprisingly close to — and sometimes lower than — UK drivers. The UK's higher per-litre cost is partly offset by more fuel-efficient vehicles and shorter average journeys.

Regional Variations

Both countries have significant regional price variation. In Australia, remote and outback areas can be 30-50 cents above capital city prices, while outer suburbs undercut inner cities by 10-15 cents. In the UK, motorway stations charge 15-20p above supermarket forecourts, and Scotland/Northern Ireland tend to be pricier than England.

For detailed regional breakdowns, see our guides on Sydney, London, Melbourne, and Manchester.

EV and Hybrid Adoption

The UK is further ahead on electric vehicle adoption, partly driven by higher fuel costs making EVs more economically attractive. The UK's 2035 ban on new petrol/diesel car sales is accelerating the transition. Australia's EV adoption is growing but remains lower, partly because cheaper fuel reduces the financial incentive to switch.

Key Takeaways

UK petrol costs about 55-65% more per litre than Australian petrol
The gap is almost entirely due to higher UK taxation (fuel duty + VAT)
Per-kilometre costs are closer due to smaller, more efficient UK vehicles
Annual fuel spend is comparable between the two countries
Both countries have significant regional variation — compare local prices on Benzio