29.08.06 In depth information about fuel tax
If you want to learn about fuel prices in detail, read the 10 page report on Fuel Taxation published by the Institute for Fiscal Studies.
The author, Andrew Leicester, looks at historic fuel prices and duty. He goes on to compare UK fuel prices with prices in other European countries. He researches how much money the government raises through fuel tax and he considers external costs such as pollution.
This is a very interesting analysis and is highly recommended for anyone wanting to really get to grips with fuel prices and how taxation is used by the government to influence our use of motor vehicles.
- 10 page report on Fuel Taxation (PDF format)
- To view this PDF, you will need Acrobat Reader








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A multilateral approach to fuel tax, instead of Britain going it alone with a unilateral approach, would make our prices rise in line with the rest of Europe and the world. There would be agreement about the taxes needed to try to reduce CO2 emissions, and toxic emissions like sulphur dioxide. The results would be:
1. similar fuel prices all over the world, or at least in Europe;
2. fair treatment for British people, instead of having to pay more;
3. less resentment by Britons at having our own oil reserves for over twenty years yet receiving none of the benefits, all of which went to successive governments;
4. fair treatment for business, having similar transport costs here instead of having higher costs than all their rivals in the EU, undermining their competitiveness;
5. to give companies less reason to close down here, or outsource to other countries where transport costs are lower, so saving jobs.
One advantage of our high fuel tax is that the oil prices rises of the last three years are not hitting us as hard as the US. We are seeing much smaller percentage increases here, because so much of the price is a fixed duty. We need to get used to even higher prices soon as global oil production is near its all-time peak, but demand is still climbing - this is what has driven the prices so high in recent years. The oil production peak is expected to be by 2010, after then we're going to see a very different world. Google for "peak oil" if you want to find out more, or for "peak oil" and "uk" to see what's going on locally on the issue.
Mike
I would have to take issue with the statement that fuel tax is used to force changes in use of vehicles and raise revenue. Whilst it does raise revenue it cannot influence vehicle use for me or most other people near me.
Living in the Bristol are where there is no economically viable alternative to using a private car (- it costs £400.00 p.a. for my son to get to school by Bus (No the LEA will not pay as he is in 6th form)) no matter what tax is added to fuel I have no option but to pay it.
In order to be used as a method of influencing vehicle use there would firstt have to be a viable alternative. This is true for everyone - not just disabled drivers such as myself.