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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COMMENTS 71 TO 75 ARE SO REAL . why dont we do something about our moaning? we English sit back and pay these so called leaders to bankrupt the country. I would be willing to take time off and be there to demenstrate how we feel.
We need a leader of our own to get organised so we get off our laurels and put bodies were are mouths are.
hay gordon why dont you cut the fat at the top! instead of the people who keep this country runnin? why dont you put your hand in your own pocket instead of ours! you need to learn not to bite the hand that feeds you,if you want this ressesion to end you need to cut taxes across the board not take sum off vat then put 2p on fuel thas just givin with 1 hand and takin away with the other your just bein greedy! you say theres no money left in the pot but theres plenty when theres a disaster in another country or to fund your
SECOND homes where most of us are stugglin to keep on get a first house! SORT IT OUT OR GRT OUT!!!!
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It seems the labour government will use global warming as an excuse to raise taxes.
Consider, they went after cars because they emit more Co2 into the atmosphere.
First by raising road tax depending on age and emissions. Most will pay more road tax due to owning an older car.
Most own an older car because they cannot afford a new one, resulting in almost double tax for poorer car owners.
Then they use the excuse of depleting oil supplies to raise petrol prices, again another tax.
When a barrel of oil was $149 we were paying the price.
Oil is now at the lowest for years and even allowing for inflation, the weak pound, and higher duty we are still paying the price.
The longer the fuel stays as high as possible the more the government make in stealth taxes.
Does anyone really believe the fuel suppliers are not controlled by government?
Now the general belief is there are too few refineries to supply the demand of diesel, hence, higher prices.
The sad reality is that politicians are thieves. They will lie.
Any issue, legitimate or not, is used by them to always justify an expansion of their powers and the revenue they take from the pockets of the public.
The basic rules seems to be: if they scare you to death, they can tax you to death.
Stealth tax was a term invented by Anne Robinson in 1996 to attack New Labour.
What should Labour call the hidden taxes that will be sneakily inserted by the Tories?
Its a merry-go-round in this country, moving tax from income to consumption is a cowardly way of generating funds to pay a deficit caused by this calamitous, inept ex-chancellor.