Gas Prices in Iceland - Fueling Up Your Rental Vehicle

Updated: Sep 23, 2020

Car fueling up with the flag of Iceland on the nozzle - Gas prices in Iceland

If you’re planning to drive in Iceland, you’re likely to be concerned about fuel costs. There’s no getting away from it: Iceland is an expensive country and petrol and diesel aren’t cheap. Like food prices – and the cost of alcoholic drinks – petrol and diesel prices can come as a bit of a shock, so what should you expect when it comes to gas prices in Iceland?

Price of gas in Iceland per litre

Brace yourselves: this is going to hurt. On the most up to date list published by Global Petrol Prices, you have to scroll a long way down to find Iceland. Only Hong Kong’s gasoline prices are higher, with Iceland’s fuel priced at US$1.96 per litre on the comparison site. To put that in context, right now the UK’s figure is US$1.63, Germany’s is US$1.55 and the USA’s is US$0.77. In fact, all the Scandinavian countries feature in the top 15. Fuel is expensive, and there’s no getting away from that.

Current gas prices in Iceland

At the pump, the main brands vary a little. The cheapest supplier at the time of writing in the Reykjavik area was Orkan’s gas station at Kópavogur, just to the south of Reykjavik and a more central branch at Reykjavíkurvegur in the capital. There, you’re likely to have to fork out around 203ISK per litre for 95 octane petrol and a little less, in the region of 202ISK per litre for diesel. That’s more like the UK average quoted above.

However, top-up the tank at ÓB, Olís or N1 in the Reykjavik area and you’re likely to encounter a higher rate, sometimes with quite a significant price hike. The most expensive fuel right now is at the Olís Sæbraut location, to the east of the capital on the 41, where you can expect to pay about 242ISK (USD 1.96) for 95 octane and 237ISK (USD 1.92) for diesel. It pays to shop around, as you can see.

For a current list of prices, check out this link. Leave Reykjavik, however, and those prices at the cheaper end of the table evaporate like petrol fumes on the wind. Elsewhere, the cheapest prices of fuel in ISK per litre are currently in the 230s. The price in Iceland is pretty consistent from region to region once you get out of Reykjavik and its surroundings.

Iceland gas station with gas and diesel - Gas prices in Iceland

Gas prices in Iceland 2020

Fuel costs, as they are heavily influenced by government taxation, tend to be pretty stable. The prices discussed above aren’t massively different from those you’d have paid in mid-2019, for instance. However, there is one trick you might want to think about. Costco, the wholesale retailer with branches in Europe, Asia and North America, offers discounted fuel to its cardholders. If you’re already a cardholder in your own country, the good news is that your card will also be accepted in Iceland, which means you can take advantage of the savings offered during your trip just as you might at home.

However, there’s a fee to join, and of course in Iceland, locations of this US-headquartered retail giant are limited to just one. In 2017, Costco opened a branch at Kauptún 3 in Garðabær, just across the street from IKEA, but it remains the only one in the country. At the time of writing, the price for unleaded petrol on its forecourt was 198ISK (USD 1.60) per litre, with diesel at 196ISK (USD 1.59) per litre. With savings this small and the inconvenience of only having one location, this hack only works if you already have a membership card and you’re likely to be passing close by.

Think about the vehicle when you rent a car

While the gas price is one thing, the amount of kilometres you can drive per litre is another entirely. If you’re planning a road trip on a budget, think about the fuel efficiency of the vehicle you plan to rent. Opting for something that’s not a gas guzzler can result in big savings when it comes to your trips to gas stations in Iceland. There are some great options for smaller and more fuel-efficient vehicles; reserve your camper rental in Iceland early to make sure you maximise your choices.

With fuel prices in Iceland at such high rates, you’ll find the savings mount up pretty quickly, particularly if you’re planning a longer trip like driving the ring road, for example. This aspect of vehicle rental isn’t going to be cheap, especially if you’re a traveller used to North American fuel prices, but at least you’ll make some savings on your fuel costs. And remember what you don’t spend filling up the car can be redirected onto accommodation, activities and of course the delicious Icelandic food you’ll be so keen to try.

Icelandic remote gas station - Gas prices in Iceland

How to pay for Gas in Iceland?

If you’re planning to rely on cards rather than cash, think about the type of card you’re carrying. Some gas stations require the use of chip and pin, for instance if you’re going to pay at the pump. Make sure you carry your debit card and a couple of credit cards in case one isn’t accepted. It’s also a good idea to carry some emergency cash to make sure you never get stranded, and of course, don’t leave it to the last minute to refuel if your travels to Iceland take you out into the countryside or to more remote parts of the country. There’s nothing more stressful than watching the fuel gauge sink perilously through the red when there’s no gas station in sight.

With careful planning, your trip to Iceland doesn’t have to be ruined by high fuel prices. Safe travels and enjoy your visit!

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