Gas Prices Around the World — US, UK, Canada & Australia Compared

The headline picture

The 2026 Iran conflict — which closed the Strait of Hormuz on February 28 and removed roughly 20% of world seaborne oil from the market — has lifted retail fuel prices in every major importing economy, but to very different degrees. The United States has the cheapest pump prices among the major English-speaking markets at $4.29 per US gallon, up 44% from a $2.98 pre-conflict baseline but cushioned by record draws on the Strategic Petroleum Reserve (down to 365.1 million barrels, the lowest since April 2024). The United Kingdom sits at 158.8 pence per litre for petrol — equivalent to about $7.50 per US gallon — up roughly 21% from the pre-conflict level and approaching the 2022 record of 191.6p. Canada and Australia both sit near $1.90 per litre in local currency, both partially shielded by temporary fuel-tax cuts that face statutory expiry in the coming months.

Three patterns hold across all four markets. First, diesel has been hit harder than petrol — Middle Eastern crudes refine into a higher diesel yield, so the Hormuz closure removes proportionally more diesel from the global pool. UK diesel is up 31% from pre-conflict (vs. 21% petrol); Australian diesel down 31% off peak (vs. 29% petrol). Second, every Anglosphere government has implemented a temporary tax measure — Canada suspended its 10¢/L federal excise (expires September 7), Australia halved its excise from 41.2 to 20.6 c/L plus state GST forgone (expires June 30), and the UK has held the 2022 5p/L duty cut in place. The US has not used the federal gas-tax-suspension tool but has drawn the SPR aggressively. Third, state and provincial variation within each country is large — California gas costs nearly $2.60/gallon more than Oklahoma; UK and Australian regional variation is narrower but still material.

State and provincial breakdowns

National averages mask substantial within-country variation. State and provincial differences are driven mainly by local taxes, environmental regulations, refining capacity, and pipeline access — not by crude price.

United States — by state extremes

The California–Oklahoma spread of $2.57/gallon — approximately 60% of the national average — is structural and persists across all crude-price environments. California's combined state excise and fees total roughly 87 cents per gallon (highest in the US) vs. Oklahoma's roughly 41 cents; California also requires its own CARB-formulated gasoline that costs more to refine, has limited spare refining capacity, and is not connected to the major Gulf-to-Midwest pipeline system. Hawaii's premium reflects its import-only supply geography; Washington's reflects its state taxes (including a carbon program) and its CARB-adjacent fuel specification.

Canada — by province

Provincial differences are driven primarily by provincial fuel taxes (BC's 30+ c/L versus Alberta's 6 c/L), the regional carbon-pricing structure, and proximity to refining capacity. Alberta consistently has the cheapest gas in Canada because it is both the producing province and has the lowest provincial fuel tax; Newfoundland is consistently the most expensive because of supply geography (it imports refined product) and its provincial petroleum-pricing regulator.

Australia — by largest city

Australian capital-city variation is narrower than US state or Canadian provincial variation — typically within a 10 c/L band, driven mostly by local supply chain length and the petrol price cycle each city operates on (the ACCC monitors these). Sydney, Melbourne and Brisbane have weekly price cycles that can swing 20-30 c/L within a week; Perth and Adelaide have more stable prices.

United Kingdom — by region

UK regional variation in pump prices is much smaller than in the US or Canada — typically within a 5p/L band — because the UK is a single tax jurisdiction with one fuel-duty rate (52.95p/L) and a single VAT rate (20%). The largest differences are between supermarket and branded forecourts (supermarket petrol averages about 4.6p/L cheaper than premium brands), and between urban areas with more competition and rural areas with fewer stations. Northern Ireland prices typically run roughly 5-10p/L higher than Great Britain prices due to the separate supply chain through Belfast.

Why fuel prices differ by country

The crude price is set on global markets and arrives at every country's refinery gate roughly equal (adjusted for shipping and crude grade). What makes pump prices differ so dramatically — from $4.29/gal in the US to about $7.50 equivalent in the UK — is essentially four downstream factors: taxes, refining, currency, and policy.

1. Fuel taxes (the largest single factor)

Fuel tax accounts for the majority of the difference between Anglosphere pump prices. UK fuel duty is 52.95p per litre (about $2.50 per US gallon equivalent), plus 20% VAT charged on top of the price including duty — so on a 158.8p/L pump price, roughly 80p (about 50%) is tax. The average US state fuel tax is roughly 30 cents per gallon, plus the federal 18.4 cents per gallon, totaling about 49 cents — less than one-fifth of the UK level. Canadian federal excise is 10 c/L (currently suspended), federal carbon pricing adds approximately 17 c/L at the consumer level, and provincial taxes range from 6 c/L (Alberta) to over 30 c/L (BC including TransLink). Australian excise was 41.2 c/L before the April 1 cut to 20.6 c/L. If you removed all national fuel taxes, US and UK pump prices would differ by less than 50 cents per US gallon equivalent.

2. Refining capacity and geography

Countries with significant refining capacity buffer themselves against crude shocks. The US refines approximately 17 million barrels per day domestically — more than its own consumption — which means US refineries can flex output to local demand without depending on imports. Australia refines under 20% of national demand, importing the rest from Singapore and South Korea; Australia's dependence on Asian refining is exactly why it has been more exposed to the Hormuz shock than its crude-import statistics suggest, since the Asian refineries themselves run on Middle Eastern crude. The UK is mid-range — it refines roughly 60% of its diesel and 80% of its petrol domestically.

3. Currency effects

Crude oil is priced in US dollars on global markets, so non-USD currencies translate the global price through their exchange rate before tax. A weaker Canadian dollar or British pound makes pump prices in those currencies higher, even at the same dollar crude price. The CAD has held around USD 0.73 through 2026, which means dollar-priced crude costs more Canadian dollars to buy than it would at parity; the GBP at around USD 1.27 has the opposite (smaller) effect.

4. Policy interventions

Three of the four major Anglosphere markets have active fuel-tax cuts in 2026 as cost-of-living measures: Canada (federal excise suspension through September 7), Australia (excise halved through June 30), and the UK (the 2022 5p/L duty cut held in place). The US has used a different tool — Strategic Petroleum Reserve releases — which suppresses the crude price US refiners pay rather than the tax on the finished product. Both tools work, but they expire on different timetables and have different mechanics.

Wider comparison — major importing markets

The table below extends the comparison beyond the four English-speaking markets to additional major economies. Prices are shown in local currency per litre (the standard unit outside the US) and converted to USD per US gallon for direct comparison. Tier 1 reference markets are starred.

Tax-cut cliffs to watch

How the 2026 Iran conflict changed each market

The Strait of Hormuz closure on February 28, 2026 — and the US-Iran kinetic exchange that has followed since — has lifted retail fuel prices in every importing economy, but the transmission mechanism differs.

United States — price spike with no rationing

US AAA national average rose from $2.98 (Feb 26) to a $4.55 peak (May 7), then eased to $4.29 (Jun 3) on the May deal-optimism wave. The US has not experienced physical rationing — every station has fuel, no government allocation, no station-level caps. The mechanism in operation is price rationing: prices rise until enough demand is destroyed to balance available supply (United Airlines has announced a 5% capacity cut for Q2/Q3 in part as price-rationing response). The SPR has muffled the spike — by some estimates, pump prices without SPR drawdown would be $0.50-$1.00/gal higher today. See US forecast for scenarios.

United Kingdom — jet fuel stress, retail steady

UK retail petrol and diesel are up but availability is stable — no physical rationing, no NOTAMs at major airports. The UK's principal exposure is to aviation jet fuel: UK aggregate jet-fuel days-of-cover have drifted from approximately 32 days at the start of March to about 24 days today, hovering just above the IEA's 23-day operational threshold. Less than 1% of UK departures have been cancelled May 3 to June 14 per DfT analysis. See UK forecast for the three-scenario jet-fuel outlook.

Canada — retail steady, aviation route losses

Canadian retail fuel availability has been stable through the crisis — no rationing, no station outages. The conflict's main Canadian impact has been in aviation: Air Canada has cut 13+ transborder routes year to date, WestJet has reduced capacity, and US-LCC backfill has been limited. The federal excise suspension has shielded the consumer-facing pump price; whether it is extended past September 7 will be the next major variable.

Australia — three improving prints, watching the cliff

Australian retail prices spiked from approximately $1.77/L (Feb 20) to $2.63/L (end-March), then have eased through April and May on the combined effect of the April 1 excise cut and benchmark moderation — three consecutive improving ACCC weekly prints to May 27. MSO petrol stocks are at the highest level since the regime began. The pivot is June 30. See Australia forecast.

European Union — road-fuel-led stress

The EU has experienced the broadest range of road-fuel stress in the developed world. Slovenia has formal road-fuel rationing in force since March 22 (50L/day private vehicles). Hungary has imposed a foreign-plate price cap. Germany's PCK Schwedt refinery has been on operative halt since the Druzhba feedstock cut. The June 17 ban on Russian short-term pipeline gas takes effect this month. See EU forecast.

Where prices are cheapest in the world

Outside the Anglosphere, the cheapest pump prices in the world are in heavily subsidised oil-producing countries: Venezuela, Iran, Libya, Algeria, Kuwait, and several other Gulf states set retail prices well below market cost as domestic policy. Headline numbers in these markets can range from approximately $0.02 to $0.40 per litre, though black-market and effective prices often differ. These prices reflect government subsidies (sometimes consuming meaningful portions of national budgets) rather than market dynamics, and most analytical comparisons exclude them as not directly comparable. Among market-priced economies, the United States consistently has the cheapest gasoline — a function of large domestic production, the world's largest refining base, and the lowest fuel-tax regime among major developed economies.

At the other end of the spectrum, Hong Kong has the most expensive market-priced petrol in the world, at approximately HK$32/L for premium grade (about $15.80 per US gallon equivalent) — a function of high government duty designed to discourage car ownership in a dense city-state. The most expensive in the EU is the Netherlands at €2.18/L (about $8.90/gallon equivalent), followed closely by Italy and France.