Diesel prices at UK pumps are now the highest in Europe as retailer margins remain above average, the RAC has warned.

The average price of diesel at UK pumps is currently 155p – 5p more expensive than the next dearest countries

The average price of diesel at UK pumps is currently 155p – 5p more expensive than both Ireland and Belgium, which are the next dearest countries on 150p, based on the latest European data available.

The UK cut fuel duty by 5p a litre in spring 2022, from 57.95p to 52.95p, following Russia’s invasion of Ukraine – but still has the highest rate of duty on diesel in Europe alongside Italy.

Despite this, diesel in Italy is still currently 7p cheaper than the UK, at an average of 148p a litre. And diesel in France is 10p less than the UK although duty there is only a penny lower at 52p.

In Belgium, where duty is the equivalent of 2p less than the UK at 51p, its diesel is 5p cheaper at 150p.

Interestingly, while France has the same VAT rate as the UK at 20%, Italy and Belgium have higher rates at 22% and 21% respectively, yet still charge less at the pumps. In Ireland, where diesel at forecourts is 5p less than the UK at 150p, duty is also 6p less at 47p a litre but notably VAT is 3% higher at 23%.

By way of comparison, the UK’s petrol is only the 11th most expensive in Europe at an average of 149p, in stark contrast to the priciest petrol which can be found in Denmark at an average of 175p. That said, duty in Denmark is far higher than in the UK – the equivalent of 59p, with VAT at 25%.

RAC fuel spokesman Simon Williams said having the most expensive diesel in Europe despite the current 5p duty cut was “a very dubious honour”.

He added that RAC calculations show the average retailer margin on diesel is 18p – 10p more than the long-term average of 8p.

The RAC warned nearly two weeks ago that drivers were still being hit by “unreasonably big” retailer margins – and urged Energy Secretary Claire Coutinho to provide a “little more encouragement” for retailers to drop prices.

But diesel pump prices have barely fallen since – even though the wholesale prices of petrol and diesel are identical at 111p a litre.

The RAC said the average price of a litre of diesel should really be around the 145p level if “retailers were charging fairer prices”.

It’s also warned that the margin on petrol is “unreasonably high” at 13p.

“We can see no good reason why retailers in Great Britain aren’t cutting their prices at the pumps. It’s important to note that in Northern Ireland, where there is greater competition for fuels in the absence of supermarket dominance, the average price of diesel is just 144.9p – 10p less than the UK average, and petrol is 6p cheaper at 142.4p.”

There is cause for hope for fairer fuel prices in the future as the Digital Markets, Competition and Consumers Act became law last week.

This gives new powers to the Competition and Markets Authority to closely monitor road fuel prices and report any sign of malpractice to the Government – following the competition watchdog’s report last year that concluded major retailers had overcharged by £900m in 2022.

The Government is also trying to increase competition with its proposed mandatory Pump Watch fuel price transparency scheme – although the RAC has said it believes a price monitoring body “with teeth” is key to increasing competition and holding retailers to account.