Recently I travelled to London, England for the wedding of a dear friend. At the reception an acquaintance of mine asked “Fuel prices here are about to reach an all time high - are petrol prices as crippling in Canada as they are here?” Though I’m not an expert in UK fuel prices by any stretch, I started to wonder – was it simply a case of supply and demand or are there any basic differences in the way we calculate the price at the pump?
So I did a little surfing and found a couple of interesting sites to explain it to me. One of the biggest differences is that the UK has a fuel duty on top of VAT (sales tax) which is set by the federal budget and is applied to the fuel before it’s sold. The fuel duty in the UK was meant to rise by 3p here this year. So that, along with the rise in the price of crude and the weaker pound has resulted in fuel being almost 120p a litre. To put it in perspective, that’s about $2.50 a litre (depending on the conversion that day). I’m a bit of a visual person, so here are a couple of sites showing the difference of price breakdown.