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








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The government should not put the price of fuel up - as everyone knows, when fuel goes up, everything goes up, where is the common sense in this?
Let me get this right. Taxpayers money is being used to bail out all the greedy banks who have been fleecing us for years! And now because it's all our fault taxpayers money is to be used to prop us up through this recession. Greed and mis-management have brought us to this sorry state of affairs and it looks like we, and our children will be paying for it for a long time! I think it time for us to follow our Polish friends and get out of this country now! Everyone abroad seems to have a better standard of living, better health care and less taxation than us. This government are nothing but a bunch of shysters and con artists. I was considering switching to LPG, but knowing the government as I do it wouldn't be long before they tax that to the hilt the same as they did with diesel! Roll on the election, if I'm still here that is.
As a disabled WAR pensioner I need my car to carry on with a amost normal life.Yes I have got a Free bus pass but living in the country I have to travel 3.5 Miles to get to a bus rout and try to park the car before catching the bus.
I was disabled in military service for this goverment and this is how they repay you,Iserved my country for 23.5 years but they say my pension is UNEARNED and they tax it.
Give with one hand and take it back with the other,It is about time we had a Goverment made up of the best from all Partys.