Where Your Fuel Money Actually Goes

It is not a new experience for drivers to feel the pinch at the pump. As financial systems fluctuate, prices are naturally impacted. Inflation automatically drives up the cost of everything that is associated with modern living, including petrol.

Listen to political talk, however, and it would seem that there is always somebody who is blamed for the high cost of fuel. In most cases, experts point the finger in every other direction before they will take any responsibility themselves.

As a layperson, this noise can be confusing.

What does account for the high cost of petrol? Who is responsible for the rising prices and where does your fuel money actually go? Breaking down these questions can help the average driver understand how the system works.

Can You Control It? 

The first thing that any driver needs to understand is that the average person has little control over what they pay at the pump.

You can shop around for car insurance and take advantage of heavy competition when it comes to many car expenses. With fuel, however, you get what is currently available, whether you like it or not. Because of this, it pays better to stick with vehicle operating expenses that you can more easily alter and adjust.

It will always pay better to take the time to get a free car insurance quote than it will to worry about fuel prices. However, knowledge is still power, especially when it comes time to make your voice heard.

Price of Petrol

price of petrol

When looking at the price of petrol, there are four different categories that add to the overall price that the consumer sees at the pump.

Surprisingly, not even half of the overall price relates directly to the cost of the petrol itself. In fact, the actual cost of the fuel equals only about 35 percent of the final price.

The biggest portion of the petrol cost goes towards the duty.

In order to move goods across international borders, each country has its own system of taxes, called a duty.

Duties can originate in both the exporting and importing country, increasing the final price of your petrol.

In the UK, most of the cost of petrol is eaten up by duties, with more than forty percent of the cost falling under this category. Only about sixteen percent of the overall price goes to the VAT.

The tiny remaining percentage accounts for the expense of delivering the petrol to your local station.

Putting It in Perspective 

Of course, knowing this information does not always change your budget; it can, however, provide some insight.

No matter how politically active you are, you will find the most noticeable impact on your expenses by sticking with what is within your power.

Maintaining your car properly will cut operating expenses. In addition, regularly get an online car insurance quote to ensure that this expense is under control. While you cannot always change the cost of petrol, you can adjust insurance bills and take advantage of high levels competition in this field.

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