Honestly, pulling onto a forecourt lately feels a bit like playing a slot machine. You see 130.9p at a Jet in south east London, but drive ten minutes down the road and suddenly it's 142p at a BP. It’s frustrating. We all check the big signs as we drive past, hoping for that tiny dip that makes a full tank feel like less of a punch to the wallet.
As of mid-January 2026, the cost of petrol UK is sitting at a national average of roughly 133.4p per litre. That sounds okay-ish compared to the nightmare peaks of 2022, but the reality on the ground is way more chaotic. Depending on where you live—say, Bexley versus a rural village in the Cotswolds—you could be paying a massive 10p difference per litre.
What is actually happening with prices today?
If you look at the data from the start of this year, prices actually fell slightly in December. The RAC Fuel Watch team noted a nearly 2p drop, which was a nice little Christmas gift for motorists. But here is the kicker: oil prices have been tumbling, recently dipping below $60 a barrel. In a fair world, that should mean we’re seeing petrol well under 130p.
It’s not happening. Why? Because of "retailer margins."
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The Competition and Markets Authority (CMA) has been making a lot of noise about this lately. They found that fuel margins—the gap between what the station pays and what you pay—stayed stubbornly high throughout 2025. Basically, when wholesale costs go down, the pump prices take the stairs. When wholesale costs go up, pump prices take the elevator.
- Supermarket average: Usually around 130.9p to 132.9p in competitive areas.
- Branded forecourts (BP/Shell): Often hovering between 141.9p and 150.2p.
- Northern Ireland: Still the king of cheap fuel, often 8p lower than the rest of the UK.
The 5p tax "timebomb" everyone is worried about
We’ve had a 5p cut in fuel duty for years now. It was supposed to be temporary, but the government kept kicking the can down the road. Well, the road is running out.
The current freeze is set to last until March 22, 2026. After that, things might get ugly. The Treasury has signaled they want to start unwinding that 5p cut and potentially bring back annual increases linked to inflation (RPI). Logistics experts are already calling this an "inflationary timebomb."
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If you think the cost of petrol UK is annoying now, imagine adding 5p plus inflation basically overnight this spring. It’s a huge headache for anyone running a small business or just trying to get the kids to school.
Supermarket fuel vs. the fancy stuff
Is there actually a difference? Most of us head to Tesco or Morrisons because it’s cheaper. Experts like Matthew Briggs from Right Fuel Card say that while all UK fuel meets basic British Standards, the branded stuff (like Shell V-Power) has extra detergents.
Does your Ford Fiesta need it? Probably not. If you’re driving a high-performance car, the additives might help keep the engine cleaner over 50,000 miles, but for a weekly commute, the supermarket stuff won't hurt your car. You’re mostly paying for the brand and the convenience of the location.
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Why does location matter so much?
It feels personal when your local station is 5p more expensive than the one near your office. It usually comes down to "hyper-local competition." If a Sainsbury’s and an Asda are right across the street from each other, they’ll engage in a price war. If a station is the only one for ten miles, they’ve got you over a barrel.
How to actually save money right now
Since we can't control global oil prices or the Chancellor's mood, we have to be smart.
- Stop "topping up": Frequent small trips to the station waste fuel just getting there. Fill up when you find a cheap spot.
- The "Fuel Finder" schemes: The CMA is pushing for a real-time data sharing scheme. Use apps like PetrolPrices or even Google Maps to check the specific area you're heading to.
- Watch your speed: It’s boring advice, but dropping from 80mph to 70mph on the motorway can improve your fuel economy by up to 25%.
- Weight check: Take those empty roof racks off and clear out the "just in case" junk in the boot. Every extra kilo costs you at the pump.
What to expect for the rest of 2026
The outlook is a bit of a mixed bag. Global oil production is steady, which should keep prices stable. However, the UK's domestic policy is the wild card. With the 5p duty cut expiry looming in March and the shift toward electric vehicle (EV) taxation starting to take shape for 2027/2028, we are in a transition period.
The cost of petrol UK isn't going back to the "good old days" of £1.10 per litre. Those days are gone. But by keeping an eye on the margins and knowing when the tax changes hit, you can at least avoid being the person paying 150p when you could have paid 131p.
Actionable steps for your next fill-up
- Download a price tracker app today: Don't guess where the cheap fuel is; check before you leave the house.
- Check your tyre pressure: Under-inflated tyres increase rolling resistance, meaning you burn more petrol for the same distance.
- Plan your March budget: Start putting a little extra aside now for the potential 5p duty hike on March 22nd.
- Join a loyalty program: If you always use the same supermarket, those points genuinely add up to a few quid off a tank every couple of months.