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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A budget of misconceptions, they have now arrived at the point where they might as well be moving the deck chairs on the Titanic. They really do not care as long as they have their jobs until 2010. Call a General Election, and let the country decide how this will be sorted out and by who!!!!! Lets start afresh with someone new in the White House and Someone new in Number 10! Cannot be any worse.
once again RANT RANT RANT and crazily a generous dollop of xenophobia - if this is a snapshot of real britian sory the speling mistakes is just so I fit in, then a very weak community it is and it's about time there was a full stop. I agree totally with Peak Oil about our addiction to oil but I don't believe this country is ready for cold turkey, and I think there is too much high-horsing among some environmentalists who live in cities. People in the rural villages, or genuinely in the sticks, are being screwed here. The public transport system is not only woeful, it is getting worse, and with government just standing by, while the (usually government-controlled) agencies responsible are praised for improvements in city service that frankly were well overdue anyway. Numerous elderly people in the income bracket that can afford to pay for public transport here would rather do that and ensure a decent service than get it free and end up with nothing! People who have no option but to use cars because of where they live are caught between environmentalists ranting at them on the one hand and the government fleecing them on the other. Yes it is high time we ate truly fresh vegetables from the allotment down the road and had solar panels on every roof to heat our water. But people need practical encouragement to get sorted, not bullying!!!
This is not going to help anyone, many small and large firms are at their wits end and this is just going to make matters worse
Many NEED their vehicles and do not just have them for pleasure. My husband cannot walk very far, and could not cope with the bus. I have to drive to the shops and anywhere we have to go. I cannot remember the last time we went on a long drive anywhere, just cannot afford it even now.