Average driving speed Iceland. In urban areas the speed limit is 50 km/h unless indicated otherwise and the limit in rural areas is 90 km/h on paved roads but only 80 km/h on gravel roads.he Ring Road (route 1), called by the locals Hringvegur, is narrow but mostly paved and easy to drive. When leaving the Ring for the F-roads to reach the Iceland highland you must have the correct vehicle, extra caution is needed and important to check if the road is open for driving.