Gas Prices in Iceland [2026]: Current Cost & How to Save

By Johanna Georgsdóttir Verified Expert

Let’s face it: knowing gas prices in Iceland before you arrive can save you from that “Wait, how much?!” moment at the pump. Driving here isn’t cheap, and with long stretches between gas stations at times, running low isn’t something you want to risk.

Some places charge more than others, so stopping at the wrong station could mean paying extra for no reason. If you’re hitting the Ring Road or just driving around town, knowing where to fill up after renting a car in Iceland can make a real difference. This guide breaks down how to find the cheapest fuel, how much fuel currently costs, and simple ways to stretch your budget. 

How Much Is Gas in Iceland Right Now?

The price of gas in Iceland is the first thing you need to know. As of July 2026, fuel prices range between 195-229 ISK/liter ($1.56-$1.83 USD/liter) for gasoline and 217-246 ISK/liter ($1.73-$1.97 USD/liter) for diesel. The average price worldwide as of July 13, 2026, is $1.47 USD/liter per the Glocal Petrol Prices index. 

While fuel tends to be higher than in many other countries, recent legislation has changed the cost of gas in Iceland. For instance, the government removed the road tax from fuel prices, transferring these costs to a monthly kilometer fee charged directly to vehicle owners. This means you’ll pay less for gas, but there will be an additional charge for your rental.

Petrol vs Diesel Prices (2026)

Gas prices in Iceland today vary between petrol and diesel. In general, diesel fuel costs more than petrol, but you often end up paying less in the long run since diesel engines are more fuel efficient. Overall, petrol runs about 20 ISK/liter ($0.15 USD/liter) less than diesel. With better fuel efficiency, you will likely need to fill up a diesel vehicle less often than a petrol vehicle.

What Fuel Will Your Road Trip Cost? (Estimator)

The cost of gas in Iceland is just part of the equation when you’re planning your budget. While gas prices have an impact on your overall budget, you need to factor in the type of vehicle you rent and its fuel efficiency, along with the distance you plan to travel, to accurately estimate how much you can expect to spend on fuel during your trip.

Fuel Efficiency

First, you need to know the fuel efficiency of the vehicle you are renting. The following shows the fuel efficiency of some of our most common fleet vehicles:

Knowing the fuel efficiency of your vehicle is the first step in figuring out how much you can expect to spend on fuel.

Iceland Ring Road Fuel Cost Estimator (2026)

To calculate your overall fuel cost for your trip, you need to know how many kilometers you plan to drive. For instance, the Ring Road is about 1,332 kilometers. The fuel needed is calculated by dividing the distance by 100 and then multiplying by the fuel efficiency of the vehicle you rent. You then multiply this number by the current price per liter.

The following is a basic cost estimation for fuel to drive the Ring Road in the above vehicles in July 2026.

The above estimates are based on the average fuel efficiency of each vehicle, along with ideal driving conditions, which can vary dramatically in Iceland. Detours from the Ring Road will also increase your overall fuel costs.

Understanding Gas Prices in Iceland

Learning about Iceland’s gas prices can feel overwhelming, but there are reasons why the prices are higher than you may be used to. There is no single reason. It’s a mix of geography, taxes, and economic factors that keeps fuel costs so high. Here is a breakdown of what drives those prices up.

Iceland’s Location Makes Everything More Expensive

Gas in Iceland is taxed higher than in many other places, and those taxes keep rising. Although the road tax was removed from the fuel prices at the end of 2025, there are still several different taxes, including:

• VAT (Value Added Tax): 19%
• Special excise duty: 17%
• Carbon tax: 6%

These numbers are not locked into place. The government has increased fuel-related taxes several times over the last few years.

• Carbon tax has risen by 86% since 2020
• Special excise tax on gasoline has increased by 20% since 2020

These tax hikes are meant to encourage drivers to switch to electric vehicles, but for most travelers, renting a gas-powered car is still the only realistic option.

Economic Factors Keep Prices High

A few other things play into why you pay so much at the pump:

• Currency Exchange Rates: The value of the Icelandic króna affects how much it costs to import fuel.
• Inflation: Rising prices across the board also hit the fuel industry.
• Global Oil Prices: Oil prices can fluctuate based on world events, influencing the base fuel costs.
• Retail Markups: About 23% of what you pay at the pump goes to fuel retailers.
• Environmental Policies: Iceland has strict carbon reduction measures that impact fuel pricing.
• Limited Competition: Iceland relies on a single fuel importer, Equinor, a Norwegian company that supplies all of Iceland’s fuel distributors.

Where to Find the Cheapest Gas

Now that we’ve established that gas prices in Iceland aren’t exactly low, it’s important to know that where you fill up makes a huge difference for your budget. Some Icelandic gas stations charge more than others, and if you’re not paying attention, you could end up spending a lot more than necessary. The key is knowing where to stop and when to fill up on your road trip.

Cheapest Gas Stations in Reykjavík and Nearby Towns

If you need to fill up your tank, Reykjavík is the best place to get it done before hitting the road. Prices here are lower than in most parts of the country, and there are a few stations where you’ll get the best deals.

• Costco has the cheapest gas prices in Iceland, about 20 ISK cheaper for gas and 12 ISK cheaper for diesel. As of July 2026, gas is 180 ISK/liter ($1.44 USD), and diesel is 205 ISK/liter ($1.64 USD) at Costco. However, you do need a Costco membership to fill up here. If you already have one, though, it’s a no-brainer!
• Orkan is another solid option. With 72 self-service stations across Iceland, they tend to keep their prices lower than most competitors. In Reykjavík in July 2026, gas prices at Orkan tend to be between 200 and 226 ISK/liter ($1.60-$1.81 USD/liter). 
• Atlantsolía has 25 stations across Iceland, with 18 of those in Reykjavík. Their prices are similar to Orkan's, making them a reliable choice.
• ÓB is another budget-friendly brand. ÓB stations in Reykjavík generally charge between 195 and 220 ISK/liter ($1.60-$1.81 USD/liter). 

Fuel Prices Outside Reykjavík

Once you leave the capital, gas prices tend to rise. You’ll still find more reasonable prices in some towns, but if you’re heading to remote areas, plan your fuel stops ahead.

• Akureyri has some of the lowest fuel prices outside Reykjavík. Atlantsolía, Orkan, and ÓB all have prices at 200 ISK/liter ($1.60 USD/liter) as of July 2026.
• Selfoss and Borgarnes are also great places to fill up, with pricing similar to Akureyri.

The real problem begins when you get into the Westfjords or East Iceland, where things are a bit more remote. Gas stations are rarer, and thus the prices rise. Expect to pay closer to 225-229 ISK/liter ($1.80-$1.83 ISD/liter) in these areas. The biggest mistake you can make is assuming that there will be another station soon. The reality is that you may have to drive longer distances between fill-ups.

How to Pay at Icelandic Gas Stations

Beyond gas prices in Iceland, many visitors wonder about the best way to pay for fuel at Icelandic gas stations. Before you arrive, there are a few things you should know about paying for your fuel. First, some gas stations are unmanned and will require a debit or credit card with a 4-digit PIN to pay at the pump. At some stations, using Apple Pay or Google Wallet can bypass the PIN requirement. Watch for payment kiosks between the pumps if there is no option to pay at the pump itself.

In addition to making sure you have a card that is accepted at the pumps, it’s important to note that there may be a hold placed on your card when you purchase fuel. This hold can be around 20,000-30,000 ISK (~$160-$240 USD). This typically happens if you choose the “full tank” option versus a specific amount. The hold usually releases in a day or two, but some banks take longer. In the end, you will only be charged for the fuel you use.

If you don’t have a PIN on your card or are worried about the hold amount, you can purchase gas cards inside the stations. These cards are brand-specific, so if you buy one for N1, you can only use it at N1 stations. At the end of your trip, if you still have money leftover on your card, you can use it in the gas station’s store for food or other items.

Fuel-Saving Tips

Saving money at the pump adds up fast, giving you more money to spend on food or activities during your stay. If you’re looking for ways to reduce your fuel costs, we suggest the following.

Choose a Car That Won’t Drain Your Wallet

Consider your plans when choosing a car to rent. Some cars sip fuel, while others are gas-guzzlers. A small, fuel-efficient rental, like the Toyota Aygo, is your best bet for saving money, but if you plan to drive F-roads or other unpaved roads, a 4x4 is non-negotiable. Diesel models are often cheaper to run, so consider one if it fits your route.

Drive Smart, Not More

You’ll run through fuel fast when you zigzag across the country with no real plans. Instead of backtracking, explore one region at a time and cut unnecessary driving. If you’re camping, pick spots near your next stop to reduce driving time and fuel stops. Consider switching accommodations each night to keep moving forward.

Seasons Change Fuel Use

Summer is the most fuel-friendly time of year. Roads are generally clear, and long daylight hours help you drive more efficiently. Winter in Iceland is brutal. Snow, ice, and strong winds force you to slow down and burn more gas. A 4x4 is preferable, and short daylight hours limit how much ground you can cover each day. Spring and fall bring wild weather shifts, so road closures and detours can wreck your fuel budget. Always check the weather and road conditions before heading out.

Use Petrol Checking Sites

Before you pass a gas station, check apps like GSMbensin or Gasvaktin that show real-time fuel prices. Stations in Iceland tend to cluster in town, so if one has high prices, another may be just around the corner. Avoiding costly fill-ups can save you a lot over time, so don’t simply stop at the first station you see without checking prices.

Use Good Driving Habits

Your driving habits can impact the fuel efficiency of the vehicle you drive. Maintaining steady speeds is one way to reduce fuel usage. You can also save by avoiding sudden braking or rapid acceleration and maintaining the proper air pressure in tires. 

FAQ

How much is gas in Iceland?

Petrol prices in Iceland are among the highest in the world. As of July 2026, prices range from 195-229 ISK/liter ($1.56-$1.83 USD/liter) for gasoline and 217-246 ISK/liter ($1.73-$1.97 USD/liter) for diesel. That makes Iceland's gas prices per gallon $5.90-$6.93/gallon for gas and $6.55-$7.46/gallon for diesel.

How much does it cost to fill a tank in Iceland?

It depends on your car, but for a typical 50-liter tank in a rental car, filling up costs around 9,750-11,450 ISK ($78-$92 USD) for a full tank of gas and 10,850-12,300 ISK ($87-$98 USD) for a full tank of diesel, as of July 2026. Bigger vehicles, especially 4x4s, will be even more expensive.

What is petrol called in Iceland?

At Icelandic gas stations, petrol is labeled as ‘Bensin,’ while diesel is simply ‘Dísel.’

How do you pay for petrol in Iceland?

Most stations are self-service and require a credit or debit card with a 4-digit PIN. Some take cash inside during staffed hours, but a working card is your safest bet. You can also buy prepaid gas cards inside manned stations for use at other stations of the same brand.

Where does Iceland get its fuel?

Iceland imports all its fuel, mostly from Norway. Despite being energy-independent for electricity and heating, the country has no oil refineries, so all petrol and diesel come from abroad.

How Much Is Gas in Iceland? Final Tips for a Cost-Effective Trip

Yes, how much gas costs in Iceland can be shocking, but it shouldn’t stop you from enjoying the road trip of a lifetime. Planning ahead makes all the difference. Getting a fuel-efficient rental, making strategic fuel stops, and using smart driving habits will help you cut costs without limiting your experience.

Gas prices vary from station to station and city to city, so checking rates before filling up can save you money. Iceland’s landscapes are worth every króna, and with the right approach, you can explore without overspending. Rent a car in Iceland from us today and make the most of your trip.