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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There's certainly no way we should be subsidising car users by reducing duties when there are much greater priorities for spending.
GET ON YOUR BIKES!!
I've had enough of the ridiculous prices now and am makiing the 25 mile round trip via pedle power 3 days a week. I take a supply of shirts on a Monday and (as Peak Oil pointed out earlier), this benefits my wallet, my health AND the environment. I don't suffer from road rage, I feel better when I get home AND I don't need to scrape my windscreen on mornings like this one. HOW MANY MORE GOOD REASONS DO YOU NEED!!
we will never get anywhere with these protests with comments like typical of this government. Did the last ,ie Tory Government cut fuel duties no of course they ddnt.
We need to learn that all polititcians are the same venal power hungry scum whether they are Blair or Thatcher or their acolytes and continually call them to account.
How do we do this? Well much as we deride them, our neighbours across the channel know how to let their politicians know when they have gone too far.
Fuel Tax in UK is ridiculously high and if all the people who posted here decided to join truckers on blocking the M25 or Central London for a day the Political underclass would listen but untl then.....