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

Allan Day November 25, 2008

report reply to Allan Day

How does this government expect people to spend more when the present situation is making more people unemployed. Fual prices should be coming down, with cost of Oil being less.




Jo Butler November 25, 2008

report reply to Jo Butler

I have always felt that the government have charged too much tax on fuel, having moved to Canada and now only paying 76.9 cents for gas i believe more so than ever that the goverment just use the tax payers as an excuse to pull more money, its all a stealth tax that they know the public will NEVER stand up to them on. citizens of Great Britian, stand up and be counted

Robert Hugh Darling November 25, 2008

report reply to Robert Hugh Darling

This Government and in particular Gordon Brown, has cost the ordinary people of this country millions in tax and lost pensions, this credit crunch was down to his poor management of the economy and allowing people to get into debt just so that they had a feel good effect about this government, now it's coming home to roost.

Keith Hilsdon November 25, 2008

report reply to Keith Hilsdon

Hike up fuel prices again what about DIESEL which never came down and is runnibg at about 16P above petrol at £105.9 so2P is going to be hard for people with diesel cars etc, i remember the goverment saying once run diesel as it is more efficient and ecconomicall and cheaper than petrol now that a lot of people have changed to diesel what have they done but pushed up the price WHAT A CONN

Lindsay Boyle November 25, 2008

report reply to Lindsay Boyle

We know that fuel duty is due to rise by 2p, but remember he has put this rise off for a year or more? Also everyone is slagging the Labour government off with regards to fuel duty and VAT, but do you really think the other parties would be any different???? I DEFINATELY THINK NOT. Eveything started to go up when Maggie Thatcher was in power, remember her words, "If you want it, take it" and we all have been, and this is where we have ended up. May this at last be the end of Thatcherism??

Baldilocks64 November 25, 2008

report reply to Baldilocks64

Before the recent high petrol price i thought the Government were due to put this 2p rise onto petrol anyway? I did find it strange that at the start of the high prices Gordon Brown was heard to say that petrol was as low as $38 per barrel and had risen to $110, i dont remember petrol being around the 45p mark, so why were we paying so much then?
When petrol was at its highest the Government agreed not to add the 2p rise, but i would think the tax on the extra income would have more than covered this 2p we were "let off with".
Maybe im wrong about it all but the word CON springs to mind.

Ron Hyde November 25, 2008

report reply to Ron Hyde

The way in which this bunch of crooks, masquerading as The Labour Party behave, I am not suprised. Being devoid of any common sense, morals, or any concern for anyone but themselves, I'm afraid we are going down faster than an avalanche.

Ron Hagan November 25, 2008

report reply to Ron Hagan

Q. How do you know the price of fuel is going to increase.
A. 1. A politician has recently said it won't, or
2. A politician says the environment levy won't cost a penny, or
3. There is a camera close by and the politician's mouth is moving

Advice: If a politician shakes your hand; check you still have that watch on your wrist.

How do you say 'fill her up' in French?

Bon Voyage fair green and pleasant isle
Forever there is a little bit of England in Germany, me

Mark November 25, 2008

report reply to Mark

Yes the Government is giving with one hand and taking with the other, but it's not just motorists who are paying for it, it's every hard working tax payer.

This blog and related comments make it appear as though there are just a handful of us in the whole country who drive........people, there are millions of us!!
So where better to sting a population than in the place where it is so easy to do, it's like taking the proverbial candy from a baby.....folk have to have cars nowadays, we don't all live in villages and towns surrounding the factories where our fathers worked and their fathers before them, etc. they WILL drive no matter what, the Gov know this, hence the tax levels applied to fuel.

What we really should be doing is lambasting the lazy scroungers of this country who do nothing but sit on their rumps allowing the likes of me and you to pay for their 10 children's weeks supply of KFC, white lightning and Sky subscription. Whilst they winge and moan about how they are not getting the correct benefits that they are entitled to!!

Peak Oil, I realise that you're ideas are suggested in good faith, but really, it's not going to happen is it? We are too dependant on the technology based around fossil fuel, so until the scientists come up with an alternative as abundant as oil, priced the same, we're stuck with it and it's associated evils. We aren't as community minded as we were, and sadly, never will be.

Mike November 25, 2008

report reply to Mike

Helloooo did any of you whingers actually read the blog...

"calculations by PetrolPrices.com show that there will be a slight increase at the pumps of 0.4p a litre"

Hardly a bank breaker. Meanwhile you'll be paying 2.5% less on all your shopping that includes VAT. More than enough to cover the 0.4p rise (I still can't believe they've made a story out of 4 tenths of a penny rise!)

This is actually a tax cut, all be it temporary - don't let the Mail/Expess/PetrolPrices.com etc. tell you otherwise.

Adrian Tyler November 25, 2008

report reply to Adrian Tyler

Whinge, whinge, whinge!!!

Adults behaving like spoilt babies who've been told they can't have the latest toy to play with! Time to grow up. If we keep on poluting the atmosphere the way we are we wont have a planet fit to drive in at all anyway. Wakey wakey!

If you really want to stick to the government and deprive them of the taxes they take from us then why not consider either walking or using public transport or perhaps not even making that journey at all. With the cost of petrol as it is now, ordering via the internet is a much cheaper option than driving to countless shops and hunting for those christmas presents.

Patricia Billimore November 25, 2008

report reply to Patricia Billimore

They are only brrowing more and more because they know they will not win the next election and they won't have the worry of sorting the mess out. They just don't like to think petrol is getting cheaper. It's an easy tax. You can't trust them at all. The reduction in VAT will not make any difference and it's not on food any way. Gordon Brown should go and the sooner the better. But saying that who in the Labour Party would take his place.

James Mcnaughton November 25, 2008

report reply to James Mcnaughton

WTF?!!! What happened to economically beneficial tax cuts to help businesses weather the downturn?! All this will do is increase transport costs even more when the price of oil increases from its current temporary low.

We've got a bunch of morons in charge of the UK tax system. Gordon Brown and Alistair Darling should both be ashamed of themselves!

Sharon Lees November 25, 2008

report reply to Sharon Lees

the government arent thinking of disabled drivers..we rely on our cads to be able to have the freedom of getting about..if they put the price of petrol up by raising the taxes on it then it is going to hit our benefits hard

Chris Whitfield November 25, 2008

report reply to Chris Whitfield

I'm currently living in America..this weekend I paid 30p per litre!! Driving is not an expense at all. Can't wait to return to the UK in December to be stitched up again by our 'government'!!

Tracey November 25, 2008

report reply to Tracey

Hey UK Folks,
I moved to Australia last november, but I am still subscribed to the Petrol Prices newsletter.
I cannot believe the UK Fuel prices.
Over here in Adelaide, we are paying about 98cents a litre. which equates to about 42p a litre.
I am shocked to see the price of fuel is going up too!
I really do think its crazy!
Hope something improves for you all!

Dick Kalinski November 25, 2008

report reply to Dick Kalinski

It's all very well us all whinging on here, but who's going to actually do something about it?!

Paul Fuszard November 25, 2008

report reply to Paul Fuszard

This is mad - the government need to listen to the people - we dont want this - we cant afford this.

Dawn Dobson November 25, 2008

report reply to Dawn Dobson

They may have reduced VAT, but they are increasing NI....................... so we lose out yet again. They always make out they are giving us something, and yet they take it away again within seconds.

Tony November 25, 2008

report reply to Tony

Is this not the last increase that was supposed to be deferred from earlier in the year?

It is just disgusting how this present labour government have such disregard when it comes to "helping" the people of it's own country run their lives. How much more do they think we can pay out? Are they actually wanting us just to stay at home and take benefits because it must be more cost effective by now?

I fill up twice a week ie 130 litres total so I can do my job and then kindly pay all the rest of my money in corporation tax, national insurance, income tax and pass on the vat!!!! (It's my own car so the government mileage allowances are about at 1996 level when it was about 30p per litre!!)

Of course there are millions like me paying the governments salary and pension, and to be treated so badlyit's just unreal. There is something seriously wrong with this present government.

If they actually realised, it is the people driving for work that keep the economy of this country financed and we need support, not more and more restrictions every day. Or do they think we just love spending all our cash on extortionately priced petrol - well obviously they think we are out on our jollies every day!!!! They really make me sick as they have not got a clue what we need.

James Campbell November 25, 2008

report reply to James Campbell

Done up like kippers AGAIN!

Born free and taxed to death sums it up perfectly!!!

Alice November 25, 2008

report reply to Alice

Get rid of Labour is all I have to say. they're taking the P***s

Anthony Duncan November 25, 2008

report reply to Anthony Duncan

Always the same.
They drop something but hit us with something completely different.

What happened to the government helping the population of this country?!

Ian November 25, 2008

report reply to Ian

As usual, they give with one hand and take with the other.
Thing is...... Dont matter who is in power, the national deficit is to the tune of several trilion, and the only ones winning are the gnomes of switzerland.
Should be worldwide law that an individual is only allowed to have a limited personal fortune...... a few hundred million should be enough for anybody... Surely to god?
The love of money is the root of all evil.

Neale Evison November 25, 2008

report reply to Neale Evison

What? OMG!! The Chancellor really needs to get a grip on reality. I mean, taxing something twice? Surely that is, if not illegal, then downright greedy? The increase on fuel prices will have no great impact on those people who have just been told they're going to pay 45% tax (You know who you are!) it merely serves to smack the ordinary citizen where it hurts, again!! It never seems to be an increased taxation upon those things that the more affluent members of society enjoy, but Joe Average who slogs his guts out driving distances to get to work gets hit again. Thing is, to get rid of labour is to instate who? They're all much the same. Stand together, for each other, to tell the government NO!!
Cut governemnt expenditure...........stop immigration!!! Makes sense to me, does it to you?

Christine Gillies November 25, 2008

report reply to Christine Gillies

I am deeply disappointed by this strategy. Just when it appears possible that the government might actually understand the pressure ordinary people are under they pull a stroke like this. I do not see the logic- fuel duty affects everyone but the VAT only affects those actually buying in the first place, that is if the retailers will actually reduce their prices. Another stealth tax move by Gordon Brown. Does he really think we are not going to notice this?

Malcolm Sweet November 25, 2008

report reply to Malcolm Sweet

what a bleeding con how long can the motorist sustain paying for everyone else.surely it is time this goverment realised they have a election in the near future but there again who is going to replace them

Paul Holt November 25, 2008

report reply to Paul Holt

This is going to do nothing to bring the cost of transporting good down at all and in fact if you are VAT registered it means that you now effectively pay 2p a litre more as you can only claim 15% back.

I bet the government loved it when the cost of fuel came down and it was only a matter of time before they slapped their bit on again.

But why does nobody publish the tax as a percentage of the whole, petrol is 25p per litre before tax and duty, final cost is approx 97p a litre. So that's 97 divided by 25 multiplied by 100 which gives us a rate of tax of 388%.

Publish that in the papers and on the news

Peter Lapham November 25, 2008

report reply to Peter Lapham

Another typical goverment ploy! The sooner we can get rid of them the better. I fear it is the first of many more rises in fuel duty if we don't all stand together and oppose it.

Nick Skeet November 25, 2008

report reply to Nick Skeet

Gordon Brown, we hate you, Brits are leaving England in their droves, along with others essential to the economy. It will come to the point where only the rich can drive. True saying.......Born free, taxed to death.

Anthony Cattani November 25, 2008

report reply to Anthony Cattani

This government are sneaky thieves. The only thing is we are not as silly as they think. I have been around too long to believe anything any government says.

Andy Fleming November 25, 2008

report reply to Andy Fleming

To the fanatic who posted (or is that junk-mailed) at No. 4.

There is far more oil in the ground then 'they' (western governments) want you to know about. Just how many living entities containing carbon have been deposited into the Earth's crust over the last 2 Billion years do you think? And how many of them have transformed and are transforming into a combustible liquid? I'd say quite a few and more than enough for a while yet (and no, I don't work for a car or an oil company, I just use my common sense and have a passing interest in science).

On the subject of the VAT sleight of hand. This government are unbelievably cynical in their attempts to duck the blame for the current mess we are in. Forget about fixing the roof in times of plenty, what about fixing the filing cabinet and just running things efficiently and cutting down on paperwork (and public sector imbeciles whose incompetence and almost unsackable existence costs us all)? I bet reducing bureaucracy and an addiction to red tape would be more effective in saving trees (and therefore, helping the environment) than any 'addiction' our current civilisation has to that nasty 'oil'.

Andy J November 25, 2008

report reply to Andy J

In response to Chris Jordan, I suspect the overall effect of reducing VAT is rather good for small businesses - instead of reducing prices, many will probably keep prices the same and pocket the difference.

I'd say the VAT cut is relatively poor 'value' for consumers for this reason - you'll probably only see it if you're buying something big like a car. However on balance it does spread the benefit across small businesses and consumers.

Whilst it's hardly the most drastic of cuts, I actually think it's a rather shrewd one. The government does not want to cut fuel prices as this sends the wrong message, so keeping them neutral by offsetting the VAT cut is probably the right move.

Normand November 25, 2008

report reply to Normand

As usual not only give with one hand and take back with the other.
But for the motorist take back TWICE as much with the other.

Any excuse to rob the motorist!

Mark November 25, 2008

report reply to Mark

I think apart from being devious - it is actually remarkably short sighted. As fuel is so over-priced in this country, most people at the moment are using as little as possible - I saw a figure saying forecourt sales were down around 25% a month or so back.

I would have thought a short term (as all nice things with governments are) duty cut of perhaps as much (!) as 10p a litre would mean a LOT of people were able to afford to drive again. 45p a gallon (plus the VAT) would make a BIG difference to many people.

If it restored sales at the forecourt, then although the percentage was down, the government would actually get more revenue.

Still, nobody said government had to be terribly bright.

Bill Lowe November 25, 2008

report reply to Bill Lowe

Well we have got to get used to the fact that we no longer live in a "democracy"but rather a regime. As such the goverment can do what they like when they like, they only reduce VAT to make you think they are helping you - NOT THIS GOVERMENT - they has wasted the capital (and continue to do so)

Martin Williams November 25, 2008

report reply to Martin Williams

Typical ! They're obviously looking for more votes at the next General Election, and let it be soon.

Colin Bruce November 25, 2008

report reply to Colin Bruce

They're a bunch of graverobbers!

We're already one of the highest taxed for fuel in the world! They take more than enough already and now they're grabbing more? What's it for? To pay for Bush's wars? Crazy.

Please don't judge all us Scots on that a-hole of a PM we have! He's a right peice of work!

Freddy Benard November 25, 2008

report reply to Freddy Benard

When has this government ever done the right thing. They seem to deliberately go out of there way to introduce any legislation that will make it easier to vote them out of power. Its like they are committing Hari Kari at the taxpayers expense. Why dont we have our own Barack Obama in the UK,we could certainly do with one.

Chris Jordan November 25, 2008

report reply to Chris Jordan

As a small business it's heartbreaking to see them hammer us once more. The amount of fuel I can afford to buy determines how many clients I can see.

It's a disgrace, just when we needed assistance they simply hit us harder.

Phil Honey November 25, 2008

report reply to Phil Honey

I think it is disgusting. Every time the government needs money they hit the motorist. They should remember that inside every car is at least one human being and voter. Based on todays performance Labour will not be in power after the next election.

Vall Wickham November 25, 2008

report reply to Vall Wickham

TYPICAL!!!!!! Just as were getting used to slightly lower fuel prices the bloody government slaps a permanent 2p extra on it!!!!!
What the hell are they trying to do to us????
Make us use buses again.................LIKE HELL I WILL.

Tracey Duffy November 25, 2008

report reply to Tracey Duffy

They don't know what they're doing (as the football chant goes)
Not a clue - bunch of idiots !!!!!!!!!!!!!

Gaynor Holmes November 25, 2008

report reply to Gaynor Holmes

Ahhhhhhhhhhhhhh! Give with one hand............................! As a mobile hairdresser I am hit very hard now with fuel costs. The last thing I want to do is put up prices but it's so very hard!

Greg Brown November 25, 2008

report reply to Greg Brown

Re:4

Considering the state of abject panic the Government is currently in, and the desperate attempts it is making to continue some semblance of business as usual (which will incidentally, shackle our children and their children in debt pretty much forever), I do believe your post is appropriate.

Whether the Government fiddle about with a few pence in tax seems quite pointless. The rules have changed. They are not with the programme.

Peak Oil November 24, 2008

report reply to Peak Oil


Yes folks, it's me again.


It's time to end our addiction to oil and here's how we can do it:

A Twelve-Step Plan to End Oil Addiction (courtesy of The Oil Drum)

1. Stop deluding ourselves. The era of cheap, readily-available oil has ended. Prices may fluctuate, but the underlying trend is up, up, up. We have to get used to using less.

2. Demand that politicians take the issue seriously. Make it an election issue. Don't take 'we've got everything under control' as an answer.

3. Stop building new roads. They're a monumental waste of money, time and effort. They encourage, rather than ease congestion and besides, the growth in car travel that's used to justify them isn't going to happen anyway.

4. Divert that money and effort into measures that address the challenges of oil depletion and climate change.

5. Make a major investment in public transport. It needs to be better, faster, more comfortable, more regular and more predictable. It needs to cater for everyone, not just peak-hour commuters though they need a better service as well.

6. Make a major investment in broadband internet to allow more people to work from home and change tax and business practices that discourage working from home. The more car trips we can avoid, the better.

7. Electrify transport where possible. We should be electrifying commuter rail where it is not already electric and using light rail (trams) in the cities. On the other end of the scale, electric bikes and scooters can make a big difference in our cities. And electric cars show promise, though there's a lot of questions to be answered yet.

8. Don't use cars unless there's no alternative. Take the bus. Take the train. Switch to a scooter. Walk or cycle - both your wallet and your doctor will thank you.

9. Deal with other aspects of our oil dependence. Agriculture, for example, is highly dependent on oil. We're going to need to change the way we grow and distribute food. Let's get to work on that now, not wait until supermarket shelves start to empty.

10. Stockpile or manufacture vital products currently imported from overseas. When oil runs short, will that still be possible? Let's take stock now and work out what we may need to start stockpiling or making (again) in the UK.

11. Think local. Ending our oil addiction isn't just up to central government, though it can play its part. Communities can work together to make themselves more resilient. Join or start a Transition Towns group in your local area.

12. Accept reality. The age of cheap oil is over. It's not coming back. As individuals and as a nation, we have to adapt.

James Newell November 24, 2008

report reply to James Newell

Obvious that us motorists were going to get hit as usual, labour thru and thru, as to regards to the other lot theyll have to do something when they get in or theyre going to have a short 4 years. Still cheaper and easier than the bus or train.

Old Codger November 24, 2008

report reply to Old Codger

Smoke and mirrors, you are quite right. Sadly I doubt this budget will help much and it will cost us all in the longer term. Typical of the incompetence of this government. Sadly I don't envisage the other lot being significantly more competent.

Mike November 24, 2008

report reply to Mike

Labour give it with one hand and take it away with the other!!

Of course this is only to compensate for the reduction in VAT - so prices should not alter (yeah right!) and should come down by 2p next December (yeah right!!!)

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