Why petrol prices differ so much between nearby UK filling stations

Petrol prices in the UK can vary by several pence per litre between neighbouring filling stations, according to motorists’ groups. The AA’s figures showed prices in Horsham ranging from 136.9p to 140.9p a litre, while about 10 miles away in Crawley they were 128.9p to 131.9p, with identical branded garages charging less in Crawley.

Industry bodies say multiple factors explain the differences. The RAC says wholesale costs make up about 23% of a litre and are driven by the oil price and the dollar–pound exchange rate; VAT and fuel duty currently account for about 56% of the pump price. Retail prices also reflect when a retailer bought fuel, supplier contracts, delivery costs, operators’ costs and margins, and the relative nimbleness of smaller forecourts in buying when prices fall.

The Competition and Markets Authority published a sector report and will repeat the exercise annually; it found supermarkets’ fuel margins averaged 8.4% in the first half of 2025, while other retailers averaged 9.8%. The CMA has pushed for a government-run price comparison tool to go live this year, saying drivers could see lower prices if competition between businesses was stronger and it becomes easier to compare prices in real time.

Motoring groups warn motorists face a “pump-price postcode lottery” and difficulty locating bargains, according to the AA, and say localised price matching can keep prices artificially high.

Key Topics

Business, Petrol Prices, Cma, Rac, Aa, Supermarkets