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Drivers prefer petrol as diesel loses its appeal

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The Volkswagen emissions scandal, environment taxes and higher fuel costs have all impacted diesel sales. We explain why UK motorists are becoming more likely to pick petrol.

Person filling their car

Buyers of new cars are increasingly choosing petrol models, ending a long period of dominance by their diesel counterparts.

As recently as 2014, diesels accounted for more than half of the new car market.

Perfect storm for diesel

But a combination of recent factors, including relatively higher fuel prices, concerns over pollution and last year’s Volkswagen emissions scandal, have severely dented the popularity of diesels.

The most recent figures from industry body the Society of Motor Manufacturers and Traders show that, despite an overall increase in the number of new vehicles sold in July, diesel purchases were down by 1.1%.

This followed a 2.1% fall in the previous month. To give a longer-term perspective, diesel cars represented 50.1% of the new vehicle market in 2014 against 47.8% for petrol models.

Declining share

But last year, diesel’s share had fallen to 48.5% against petrol’s 48.8%.

So far in 2016, diesels have accounted for 48% of sales, while petrol has held steady at 48.8%.

Just over 3% of the market is currently made up of alternatively fuelled vehicles (AFVs), such as electric cars and hybrids – and this is a significant rise of more than 20% on sales over the first seven months of last year.

Fuel tank indicator

So why have diesels fallen out of favour, and why are motorists more likely to prefer petrol?

Fuel price disparity

In the UK, diesel has long been priced above petrol – unlike in many European countries, where producers and retailers have benefited from state subsidies.

To some extent, the fact that filling up is more expensive in Britain has been offset by the higher fuel efficiency of diesel engines.

But last year, as wholesale oil prices fell, retailers faced heavy criticism for their perceived failure to pass on savings to diesel customers as quickly as they did to drivers of petrol cars. This is likely to have reinforced the impression that diesel running costs are considerably more expensive.

The emissions scandal

The VW emissions scandal that emerged in the United States last September has undoubtedly had a damaging impact on the perception of diesel cars among motorists all over the world.

The “cheat software” that was identified by American regulators as having given VW diesels an unfair and misleading advantage in US emissions tests may not have been used to such an extent in other markets.

But faith in diesels in general has suffered, and consumers now have much greater awareness of the potential harmfulness of the nitrogen oxide emissions generated by diesel engines.

Environmental tax crackdown

These emissions have also been brought into the spotlight by a number of new environmental taxes on diesels.

Over recent years, governments in Europe have begun to realise that diesel engines have a more damaging impact on air quality than had previously been thought.

In the UK, ministers are planning the introduction by 2020 of Clean Air Zones in several city centres: here, the most polluting commercial vehicles will be charged, but private cars could also be affected depending on the policies adopted by the local authorities concerned.

Some councils, such as Islington in north London, have already imposed higher residents’ parking charges on all diesel cars.

Busy motorway

Petrol’s advantage

These issues have created a great deal of uncertainty for people who are thinking about choosing a diesel as their next car – and it is no wonder that petrol models are increasingly being preferred.

Drivers of petrol vehicles appear more likely to benefit from falls in pump prices, and at present there seems very little prospect of owners being surprised with new environmental charges.

Finally, the change in the vehicle excise duty (VED) system due next year means that all new cars will face a flat rate of tax if they produce more than zero carbon dioxide emissions.

This is set to erode one of the last advantages of diesel engines – that they tend to emit relatively low amounts of CO2 – and it will therefore be of little surprise if diesels’ share of the market continues its decline.

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