How Much Will I Pay for Gas in Iceland?

Gas prices in Iceland are among the most common queries visitors to Iceland have. There is no hiding the fact that Iceland is an expensive country so you’ll want to save in areas where you can. Knowing what to expect, and with a few simple techniques, you could save significantly on fuel costs on your trip.

If you’re planning a self-drive tour of the country soon, our comprehensive guide gives you a realistic estimate of fuel prices in Iceland.

Factors Influencing Gas Prices in Iceland 

Iceland’s gas consumption is influenced by a combination of varied factors. An understanding of these can not only help you budget realistically for your self-drive itinerary but also get a glimpse into how gas prices influence daily life in Iceland and its economy.

Location 

One of the primary causes of the high cost of fuel in Iceland is its remote geographical location, which increases gas import prices. Within the island nation itself, prices tend to vary considerably, with remote regions costing more than easily accessible mainland cities such as Reykjavík.

An Orkan gas station in Reykjavík

Economy

Economies across the world are subject to inflation, and Iceland’s is no exception. The Icelandic króna (ISK) exchange rate against major currencies, especially the US dollar (USD), also affects domestic gas prices which spike upwards when the króna weakens against the dollar, thereby increasing import costs.

Your Vehicle 

Your choice of rental car is one of the most important choices you’ll make for your Icelandic adventure. Based on the model and brand of the car, gas consumption can vary. Diesel cars, especially 4WDs, use more fuel than cars running on petrol, which tends to be cheaper.

Driving Routes

For those new to driving in Iceland, you should know that road conditions vary across the country. You’ll need less fuel for the neatly paved Golden Circle, compared to the rugged Highlands. Similarly, you’ll end up paying more on gas for day trips which involve driving back and forth between an attraction and your accommodation, as opposed to round road trips.

Seasonal Variations

Road trips in Iceland are dependent upon weather conditions, which also influence fuel prices. Driving in the winter can be challenging due to snow and the biting Icelandic wind. Sometimes, you may have to start your car multiple times due to the cold, and this can lead to increased fuel gas consumption. 

Gas Prices in Reykjavík vs. Rural Areas 

In Iceland, gas prices tend to vary by region. Cities like Reykjavík are generally cheaper than rural areas owing to their easy access to fuel suppliers and the competition between them. If you’re venturing into remote areas on longer self-drive trips of up to seven days, you need to be prepared for relatively higher fuel prices. In regions such as the Icelandic Highlands, accessible only via the challenging F-roads, gas costs more due to the increased transportation costs and low competition between limited suppliers. 

A woman driving through the south of Iceland

Current Gas Prices in Iceland 

Fuel prices in Iceland can vary based on gas stations and suppliers. Currently, Orkan is the cheapest supplier with petrol costing approximately 315 ISK (2.30 US$) and diesel being 310 ISK (2.25 US$) per liter. ÓB, Olis, and N1 are some of the more expensive suppliers, especially in Reykjavík. If you have a Costo membership in your country of residence, you can use it for discounts on fuel in Iceland. 

How to Save Money on Gas in Iceland?

Although you can’t do much to change gas prices in Iceland, there are definitely ways to make the costs more manageable.

Drive Efficiently 

When it comes to saving money on fuel, you’ll need to pay attention to your driving. Little things such as maintaining a steady pace, and not accelerating frequently can go a long way in saving fuel. If you avoid speeding and keep under the limit of 50 km/hr in Iceland, you could save up to 25% in gas consumption.

Pick the Right Vehicle 

Camper rentals can vary based on fuel efficiency so picking the right one is crucial. Although diesel itself is more expensive, diesel cars tend to be more efficient than gasoline ones. Compare the gas consumption of newer rentals as this could make a substantial difference in your expenses. 

Use Self-Service Pumps 

Self-service stations are generally cheaper as they don’t have employees. You’ll need to use a pin and chip card to pay for gas, so make sure you have one if you’re planning to use it on your trip.

Take Advantage of Discounts and Special Offers

Iceland car rental companies sometimes offer discounts for popular attractions and activities. This could also include a gas chip that could save you up to 3 ISK/liter at certain gas stations. When you do the math, the potential savings for the total trip certainly add up.

A pink sunset on the Golden Circle route in Iceland

There is no denying that gas prices in Iceland can be high, with the country’s remote geographical location being one of the main causes. However, there are ways to save money on fuel that can help you enjoy a more cost-efficient trip. Now that you’re armed with this knowledge, you can set off with confidence on your Icelandic adventure!