Posts on Facebook showing a picture of a price sign at a petrol station forecourt claim: “We just had to share this photo of Morrisons filling station in Gibraltar. And yes the price is in pounds sterling. This is what fuel really costs without tax!”
There’s no reason to believe the picture wasn’t taken at a Morrisons petrol station in Gibraltar. Unverified pictures of the area on Google appear to match the image on Facebook, as does a still image from Google Street View.
But it’s wrong to claim that the prices on the sign show “what fuel really costs without tax”. Although Gibraltar doesn’t have VAT, it does have fuel duty.
Gibraltar is a British Overseas Territory (where the currency is pounds sterling) and does not have VAT, or value added tax, which in the UK is charged at 20% on most goods and services.
But there is a tax on fuel in Gibraltar, in the form of fuel duty, although it is lower than in the UK. In April 2022, the government in Gibraltar reduced fuel duty on diesel from 40p per litre to 25p per litre and on petrol from between 37p and 38p to 25p per litre too, until 1 July 2022.
In the UK, at the time of writing, fuel duty on unleaded petrol and diesel is charged at 52.95p per litre. That’s the rate following a 5p cut announced by Chancellor Rishi Sunak in the 2022 Spring Statement.
In the UK, both the 20% VAT rate and fuel duty are charged on petrol, diesel and other vehicle fuels. This means that currently, 45% of the pump price for petrol and 44% for diesel is tax.
Using the figures from another of our recent articles about fuel, the price of a litre of petrol costing £1.85 at the time would have been about £1.01 without duty or VAT.
Image courtesy of James Frewin