Fuel prices to rise as motorist hit with 2p duty increase

11164 Comments | Add Comment | Blog entry posted 24th November, 2008

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A permanent 2p duty increase in fuel tax has been introduced in the pre-budget report, which despite being presented as revenue neutral, will mean that fuel prices will rise over the next year and beyond.

The move to increase fuel duty by 2p has been introduced to offset the rate cut in VAT from 17.5% to 15%. However, although the VAT holiday will last 13 months, the 2p duty rise is permanent.

When VAT returns to 17.5% motorists will still be paying the higher rate fuel tax of 52.35p per litre and the higher rate VAT, making tax 74% of the total cost of a litre of fuel, and instantly boosting the cost of fuel by 2p a litre.

If the Chancellor had instead announced scrapping duty and VAT, a litre of petrol would cost just 25p.

The changes are designed to be neutral, but calculations by PetrolPrices.com show that there will be a slight increase at the pumps of 0.4p a litre, or 20p per average 50 litre tank of unleaded when the changes come into effect on December 1st. The fact that fuel prices will increase at all is contrary to the message from the Chancellor that the changes will be revenue neutral.

Motorists and businesses will effectively be bearing the brunt of the costs involved with implementing changes to help the UK as it heads into a recession.

Fuel is taxed twice – a fixed duty and percentage VAT. The changes mean that the fuel duty will be 52.35p per litre and VAT will be 15% from the 1st December.

Do you think the Chancellor did the right thing? Is it fair to make motorists foot the bill for the cost of reducing VAT? Should we have VAT on fuel at all?

Replies to Fuel prices to rise as motorist hit with 2p duty increase

Pam O'donnell January 26, 2011

report reply to Pam O'donnell

Do polititions live in the real world, away from London. We live in Scotland and have a 50 mile round trip to our nearest fuel station, shops, hospital, doctor, dentist etc., etc. We have one landrover between the two of us which gets us to work, tows my horse and does everything else. We do not have a bus service so we are totally reliant on our vehicle. We do not have the luxury of public transport. It is totally unjustifiable to increase fuel duty again making going to work almost too expensive as wages are so low. Now VAT has risen I feel that fuel duty should be dropped significantly to allow people to breath a little instead of taking every penny off us. I may have to give up work because it's costing me too much money in diesel.

Gary Conroy January 2, 2011

report reply to Gary Conroy

once again the common man is been shafted by a dictator millionare in a suit who knows nothing about the day to day up hill struggle of the average uk family... we are been punished finacially for CRIMES we didnt commit... when will it stop... when will we actully get a say in running the country for the better ?

Robert Marsden September 17, 2009

report reply to Robert Marsden

I THINK THE GOV SHOULD NOT INCREASE FUEL TAX BECAUSE WE R THE MOST TAXED IN THE WORLD IF THEY ALL PAID THERE TAX OUT OFF THERE OWN POCKETS INSTEAD OF GETTING ALL THERE PERKS THEN THEY WOULD SOON DROP THE TAX ALL THE LEECHS

Emily September 5, 2009

report reply to Emily

Could you help me. We make a living by what we get, we make a life by what we give.
I am from Morocco and learning to write in English, give please true I wrote the following sentence: "Hanis was second to be given, and was visited about her card on the biggest none in herself, to which she announced that it was her place, but that she's several with it."

Waiting for a reply :o, Emily.

Davespur May 31, 2009

report reply to Davespur

What is the point of making vat cuts if petrol prices make thing rise and leave us all with less in our pockets. I cant belive gordan brown just ignores this we are heading for a pound a litre this will make shoppers stay at home .The tories allowed big out of town shopping and its these places that will suffer greed will bankrupt the world and oil companys are killing there own industry by allowing there product to rise to ridiculess prices .And making electric cars look a better prosbect every day.

Andrew Pemberton April 28, 2009

report reply to Andrew Pemberton

slowly fuel is getting higher,time to end this madness,i drive for a living,if im laid off work will i get the same rights to full state benifits as non europeans,hope so.
if the transport industries say enough is enough,as happens in france and spain,and just set a time on our clocks to STOP AND PARK WHERE WE ARE BE IT CITY CENTRE OR MOTORWAY,DUEL CARRAGEWAY OR COUNTRY LANE,BUT WE MUST HAVE THE SUPPORT OF JOE PUBLIC,STOP NON UK TRUCKS ENTERING UK WITH ALL THE FUEL THEY NEED TO TRANSIT UK,AT ONE TIME I WAS ONLY ALLOWED TO ENTER FRANCE WITH 200 LTRS OF FUEL ON MY TRUCK,TO TO SAY IT OUT LOUD ENOUGH IS ENOUGH.

Andrew Smith April 10, 2009

report reply to Andrew Smith

i think it high time we stood up to this so called goverment the mps can watch porn movies & buy bath plugs at our expense & get driven around in chauffer driven cars yet it us who foots the bill every time at the pumps gordon brown is a bare face liar he does nothing for the working class does nothing for us hard savers he screws every penny out of us & he swans about like some film star lets get them out let them do a decent hard days graft.

John Howell April 10, 2009

report reply to John Howell

No they are just being crafty. The VAT economic stimulus was a bad move. It has helped companies like ASDA rather than those companies that sell "capital" type expenditure items that are expensive to buy. For example, cars are crucial to the mobility of our society. We therefore need to get the emissions and the fuel consumption down. We need also to change out expensive to run cars for newer more efficient models. The government is doing something about it but they couuld have done so much more. This is almost a lost opportunity and one that woud have won a lot of public support.

David Morgan April 10, 2009

report reply to David Morgan

We are all getting conned by a goverment that is more concerned with keeping it's own ministers out of jail and in the trough, any hike in fuel vat will finance the free mansions and subs to the porn channels on tv are far as they are concerned we are MUGS waiting to be fodder for THEIR pocket money excesses, sleaze, don't make me laugh! emigration is the way forward as some bloggers on here have pointed out.
Oh and by the way, this pensioner has had to revert to shanks pony due to the last outbreak of ministerial greed!

Cev April 9, 2009

report reply to Cev


I think that this extra cash is being spent trying to keep up with M.P's expense claims, or maybe just Jaqui Smith's family films

Ahmed Molvi April 9, 2009

report reply to Ahmed Molvi

what a disgrace this government is not long ago it was asking the middle east oil cartels to cut there prices! what hypocrites most of the money we spend on petrol goes to the government HIGHWAY ROBBERY I SAY!

Robert Ross April 2, 2009

report reply to Robert Ross

What do you expect from a bunch of Scottish ex barristers and failed accountants - what we need is some forward thinking honest businessmen and "normal" people who are capable of managing our country who are not in it for the prestige, power and questionable perks (recent creative expense accounting).
Lawyers think they can solve problems by creating new laws and accountants only make decisions based on last years figures.

Claire Findlay March 31, 2009

report reply to Claire Findlay

I think it is outrageous, in the current financial situation should the government not be trying to find ways to help ease the general public's financial strain, rather than simply finding new ways to get more money from us. Perhaps if they stop squandering the tax payers money on anything and everything, we would be able to cut the tax on petrol not increase it. I believe they have just given themselves a pay rise as well more than any other government or civil service, I wonder if they worry about the credit crunch! I guess not!

H. Day March 18, 2009

report reply to H. Day

Great! Role on the next election, when with any luck labour will be voted out.

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