Question

To ask the Secretary of State for Energy and Climate Change, if he will hold discussions with representatives of the fuel industry to establish the reasons why the retail price differential between petrol and diesel (a) in the UK favours petrol vehicles and (b) in the Irish Republic favours diesel drivers.

Wholesale fuel prices are fundamentally driven by crude prices. At the margin supply and demand factors for individual refined products will influence their prices.

Such factors are not necessarily the same for both petrol and diesel, which can lead to disparities in prices. For example, the UK produces more petrol than is demanded domestically, and this surplus puts downward pressure on the petrol price. In contrast, the UK is a net importer of diesel and so extra costs of importing such as transportation costs must be factored into diesel prices.

While petrol and diesel are taxed at differing rates in Ireland, they are currently treated equally for tax purposes in the UK.